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If you're a risk taker, silver may be worth a look

by , 09 November 2015

If you've been watching the price of silver, you may have noticed that it's been doing marginally better lately.

The precious metal is renowned for its volatility, but there are signs that things could be changing for silver.

Let's take a closer look…


Could the future be looking brighter for silver?

 
Earlier this year, silver plunged to a five-year low. But by mid-October, the metal had managed to claw its way back up to $16. That’s the highest level that silver’s traded at for more than three months. 
 
You can see the erratic price movements of silver below…
 
 
Chart of the silver price
 

As silver is a monetary metal, it tends to follow what’s going on with the gold price, but with a lot more volatility. Silver over exaggerates the movements of gold. If gold rises, it rises more in percentage terms. If gold falls, it falls more in percentage terms.
 

Silver has many industrial uses

 
But what makes silver different from gold is its industrial uses. It’s a vital ingredient in electronics, biotech and optics. These industrial uses account for around 50% of its demand.
 
Recently, an increasing number of analysts are more positive about silver’s future, but the recent hints by the US Federal Reserve’s plan to raise interest rates may put a dampener on things as a stronger dollar means weaker commodity prices.
 
What’s helping silver is sentiment towards industrial commodities is on the up. This could help silver out over the longer term.
 
If you think the silver price could stand a chance at a sustained recovery over the longer term it may be time to buy some. But this play isn’t for the faint hearted. The price of silver tends to bounce around a lot.
 
So there you have it. Why if you’re a risk taker, silver may be worth a look.
 
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If you're a risk taker, silver may be worth a look
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