Silver is the next investment bet - Buy Silver

Solar panels needed for solar power use silver. As far as industrial uses of silver go, the solar energy sector is showing the most growth potential, says Devendra Nevgi, founder and principal partner, Delta Global Partners.

In fact, with the tsunami in Japan bringing the world on the brink of a nuclear disaster, the demand for solar power is expected to go up further. This will fuel the demand for silver. Morgan feels the "solar demand could reach 130 million ounces per year around 2014 and continue through 2020". The silver production in 2010 was about 750 million ounces.

Medical Uses Of Silver: This is another area where the demand for silver is expected to touch 100 million ounces by 2020, says Morgan.

"Silver-based cleaners and bandages are being increasingly used throughout the world," he says. Silver is also used in catheters, pacemakers, valves, feeding tubes as well as medical appliances inserted in the human body.

Silver is used in anti-bacterial sportswear to reduce odour, anti-bacterial clothing for soldiers and medical personnel to reduce infections, and in food packaging, anti-bacterial upholstery, etc. The demand for this segment is around 38 million ounces of silver per year, he says.

"New uses for silver are being found almost every day, particularly in the biocide arena," says Jeff Clark who authored The Casey Research 2011 Silver Investing Guide. In fact, the Food and Drug Administration in the United States has approved the adding of silver to bottled water to helkill bacteria.

"The important point is government approval because this opens the door for major municipalities to use silver for water purification," says Morgan. Caveat is "Such demand carries the risk of technological obsolescence. For instance, the digital revolution in image capturing and storing has killed the demand for silver in the photography sector."

Scrap metal accounts for about 20% of silver's total supply.

As Morgan puts it: "In about three years or so, we will see silver in a deficit situation where total supply mining + recycling will not meet total demand."

Also, a lot of silver is produced as a by-product of mining of other metals like gold, lead, zinc, etc. So it's not easy to ramp up the supply of silver suddenly. "Gold mining has most likely peaked, and a full 13% of silver coming to the surface is a result of gold mining," says Morgan.

Given this situation, it is very difficult to meet out the demand of Silver equally with the Supply of Silver we have and it is very difficult to recycle and also produce.

"I expect the next big rally to begin no later than mid-August, and likely at the beginning of August or even late-July," says Nielson of bullionbullscanada.com.

Morgan expects the rally in the fourth quarter of this year. As far as targets go, Morgan feels, in the medium term, silver should touch at least $45 per ounce (around Rs 68,000 per kg); in the long term, it should touch around $100 per ounce (around Rs 2 lakh per kg). Silver, therefore, still is a good investment bet.

inferred from times of india.