Silver sales are burgeoning and investors are accumulating record holdings, even outpacing their holdings of gold.
Investors are concerned that a major global crisis will occur causing massive bankruptcies. Debt levels in Western governments and financial institutions are eroding investor confidence.
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Silver prices have almost tripled since 2008, attaining second place behind platinum in the gains for precious metals this year as more governments have pledged aggressive action to stimulate their economies.
Investors are concerned that extremely easy monetary policies will spur inflation and weaken currencies, even to the point of seeing the dollar lose its dominance.
Hedge funds and other speculators have placed 12 times their bets since June that the metal would go higher.
Silver exchange-traded products (ETPs) reached a record 18,854 metric tons in November.
Current holdings are worth about $19.2 billion.
Speculators have not been bearish on the metal in five years. Barclays predicts silver will reach a surplus in 2013 that may drag prices lower if economic growth slows because it would drop demand for consumer goods.
Cars contain about 30 grams of silver and mobile phones about .25 grams.
Silver’s historic volatility is also about double that of gold’s, indicating investors are exposed to greater risk from price swings than holders of gold.