Can savvy investors position into silver at low prices now before silver soars?
"Investors and exchange-traded funds regardless of fundamental factors may drive the price of silver to new highs this year, having already tripled in four years, analysts say.
But prices are only likely to gain momentum after breaching last May's 25-year high of $15.17 an ounce, which compares with current prices of around $13.70.
"For silver to really look bullish, it has to get above $15. If we get above that, I believe silver could go to $20," Peter Hillyard, head of metals sales at ANZ Investment Bank, said.
"Silver, for long periods, remains ignored and suddenly sparks to life. The ETFs will be important to attract investor interest," he added.
Analysts say exchange-traded funds (ETFs) have the potential to absorb a sizeable portion of the above-ground metal supply and push the market into deficit, making silver more attractive.
High prices have hit jewellery demand in past years and offtake from the photographic industry, a major silver consumer a decade ago, has been constantly falling due to the growing popularity of digital photography.
But industrial demand is growing fast, compensating for some of the losses in other sectors. Mine output has been moderate, but new projects are expected to lift output in the long run.
Silver spent four years, starting in 1999, between $4.00 and $6.00 and ounce and the next two years to late 2005 in a trading range of $5.00 and $9.00. But prices have been volatile since early 2006, hovering in a broad trading range of $9.00-$15.17."