INSTITUTIONAL BUYING: The Coming Silver Game Changer
Steve St. Angelo
January 21, 2014
The key to investing in silver is getting in before the big gains are made. Even though the price of silver is up substantially in the past decade, it has only kept in par with the rise of the cost of energy.
In 2004 the price of a barrel of Brent crude was $38 and silver was $6.67. Today the price of silver is $20.50 and Brent crude trading at an average $110 for the past month. Basically, the price of both have tripled in the past decade:
Brent Crude = $38 X (3) = $114
Silver = $6.67 X (3) = $20.01
The market price of silver is keeping pace with the percentage increase in the price of oil. This seems to be how the market is currently pricing silver.. same with copper. The price of copper was $1.25 lb in 2004 and in 2013 it averaged $3.30 lb.
Copper = $1.25 lb X (3)= $3.75
Of course there are many additional factors that go into pricing a commodity, however we can see that the price of energy is good indicator in finding a base guideline.