Because of the focus on silver as an inflation buster, second to its bigger cousin gold, the metal has been held down in price during these tough economic times.
While that may go on for a season of time, the inevitable growing demand for silver should cause prices over the long term to increase significantly, as consumption in some cases isn't recoverable, and the metal use is lost forever.
This has caused some short term pain to silver companies, which in some cases have sold more of the metal, while having profits drop off significantly during that same sales period.
There is no other reason for this than companies not being willing to pay higher prices because of their own weakened positions. The good news is demand isn't going to slow down, and that will drive up the prices of silver over the long haul.
A lot of investors look at the traditional uses of silver, and hear news primarily about photography, which is the only sector where silver usage is dropping, because of photography going digital.
Other traditional silver uses like silverware and jewelry continue to grow.
But a major underlying factor which will drive up silver prices is in industrial uses. Not just that it is being used and driving demand, but that in some cases it is now being used in a way that it cannot be recovered.
Some of the larger losses of silver in industrial use concerns surging demand in electronics, jet engine bearings (as well as other bearings), batteries, and as a chemical catalyst.
Demand in all the above areas for silver are either staying a current levels or increasing. But again, the silver used in them cannot be recycled, which will drive up silver prices going forward.
This isn't even the entire story though, as other emerging uses will put pressure on silver stockpiles, and, again, drive up prices.
Sectors included here are solar cells, paints, mirrors (because of reflective properties), and medicine, where the extraordinary anti-bacterial properties of the metal can be used in a plethora of situations to reduce infection.
Connected to the anti-bacterial use is its extreme value to water purification, where high demand for clean water drives the demand for anti-bacterial agents like silver.
As you can see, over the long term, silver looks to be one of the commodities which will be in the highest demand, while some of its uses will make it impossible to recover the metal to recycle.
The long term outlook looks tremendously bullish for silver, and investors should reap a huge harvest from this metal which has temporarily been held back from soaring in price because of temporary slowdown in demand, and ability of companies to pay higher prices.
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