Three triggers that could push silver over $50 ounce

A sovereign debt default, a credit downgrade of U.S. debt or a housing collapse in Asia could easily push the price of silver above $50 per ounce as investors would be left clamoring for a safety trade.

Silver’s low price and its hybrid status between a monetary metal and an industrial metal makes it vulnerable to major price swings. Here are what I see as three major triggers that could push silver over $50 an ounce:

1) Geo-political turmoil. It’s easy to slip into a false sense of security regarding the U.S., European and Asian economies. While we averted a widespread collapse of the banking system in the U.S., governments around the world are growing their money supply in a race to devalue their currencies. The implications of this could be far more reaching than investors and the public anticipate. A sovereign debt default by a major European country, a credit downgrade of U.S. debt or a housing collapse in Asia could all push the price of silver above $50 per ounce as investors will be left clamoring for a safety trade in an environment where there aren’t many safety trades left.

2) Government buying. Large-scale gold purchases by central banks and governments around the world made headlines last year. If central banks and governments followed suit this year by buying and storing silver, they’d be sending a very clear message to the markets that silver is a monetary metal, and its one that, like gold, offers protection against falling fiat currencies.

3) The emergence of new industrial uses for silver. Entirely new industrial uses for silver are growing rapidly. Phillips Baker, CEO of Hecla Mining Company (NYSE:HL), claims silver’s use in new products grew by 18 percent last year. Specifically, Baker cites last year’s adoption of silver as a component in the manufacturing of solar panels and iPads.

Silver’s antimicrobial properties, though, prove more tantalizing to me. Researchers at Bar-Ilan University in Israel announced last week that they’d created a new form of silver-infused paper that can can fight bacteria including E. coli and S. aureus. If their development receives FDA approval, it could transform the food industry and become standard packaging for meats around the world. That would be great for consumers and just as good for silver bulls. Similar transformative breakthroughs that involve silver could aggressively push up prices for the metal.

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2 thoughts on “Three triggers that could push silver over $50 ounce”

  1. I have a web site where I give investment advise on penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If theirs anyone thats interested in these type of stocks . you can check out my web site by just clicking my name. well its not even the end of april and silver is almost 50 dollars an ounce. I still think silver is a better buy here than gold.

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