Silver is both an industrial and monetary metal.
Silver spends life as a stepchild, both in mining production and commercial use. Of all silver mined, 73% is as a byproduct of other metals. (Thus Silver Wheaton was born!) On the demand side, silver is tremendously useful as the best conductor of electricity. Silver is typically only a small fraction of the total cost of any industrial application. The important takeaway is that industrial silver supply and demand is not sensitive to price.
As an industrial metal silver saw slack demand last decade. In a facebook world with digital cameras, industrial demand in photography collapsed. Should the solar industry gain traction, however, industrial silver demand would explode. (Reuters)
The Independent Stock Analysis interest in silver is on the monetary side. Often referred to as ‘poor man’s gold’, sneaking a great deal of silver past the proverbial border patrol officer would be difficult. Yet the common man can sooner afford silver than gold.
In a precious metal bull market, gold tends to outperform silver until near the end. With the precious metal bull market twelve years old, any maniac end is nearer than the beginning.
And yet silver still has catching up to do to gold. Silver Price Forecast: Is Silver Fast On Its Way To $50 (Hubert Moolman). Only then do the drinks arrive to the party. That’s the theory anyway.
John Embry Expects a Silver Price Explosion Driven by Physical Shortage at Gold Silver Worlds.
Silver bulls can get carried away: “So the targets of this move, before we have a major correction, are still $4,000 to $5,000 on gold, and $150 (a surge of 433%) on silver…That could actually happen in the next twelve months.” King World News
FWIW, the hard core gold bugs are into conspiracy and suppression theory’s involving JP Morgan (Silver Doctors). They’ll tell you the GLD and SLV may not have the metal.