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Four factors fuelling silver's next bull market

by , 26 May 2014

The price of silver has been languishing for the past few years. It's lucky to get close to $20 an ounce after trading near $50 an ounce three years ago. But there are several factors that will put upward pressure on the price of silver and propel it on a new bull run. Let's take a closer look at what these are…

Silver bull market factor #1: Demand by the US Mint

The steep drop in silver prices last year unleashed a wave of investors looking to buy silver coins. This amounted to coins weighing over 40 million ounces sold last year in the US.

And this year is shaping up to be very similar. So far, consumers have bought over 13.879 million ounces of coins.

This shows investors think the silver price is going to rise again.

Silver bull market factor #2: Silver ETFs are seeing net inflows

Last year, there wasn’t much change is silver ETF holdings, Jeff Clark in The Crux explains. This is in comparison to the huge fall in gold-backed ETFs last year.

Silver exchange traded products (ETPs) are up 3.5% to date. Gold ETPs on the other hand are down 1%.

Silver bull market factor #3: More people are buying silver jewellery

The lower prices in the silver market has led to more people buying silver jewellery.

In the UK for example, in February, silver jewellery sales jumped 40.4%.

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Silver bull market #4: India is buying silver at an astonishing rate

Last year, India imported 180% more silver than it did in 2012. India’s imports sucked up 20% of silver demand around the world.

Last month, the Indian government allowed the imports of gold to begin again at six banks. This meant that silver imports dropped drastically. This likely had something to do with the poor silver price.

But if the Indian government keeps strict controls over gold imports, silver will benefit.

So there you have it, four factors fuelling silver’s next bull market.

Four factors fuelling silver's next bull market
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