Some analysts opine –If gold was the investment of the last decade then silver could turn out to be the investment of this decade. Analysts hold the fundamentals responsible for this turnaround. The gold/silver ratio at the current moment is 50:1, which means that investors are buying 50 ounces of silver for every ounce of gold. Not only that, there is nowhere close to as much silver available for investment as there is for gold.

There have been a lot of discussions regarding the silver manipulation by the investors and there seems to be some truth in this matter. The events orchestrated in the silver market last April were highly suspicious. The events started with a record amount of selling sending the prices plummeting by six dollars on a day when the Chinese markets were closed. The COMEX raised the margin requirements four times in that very same week. This put a tremendous amount of stress in the market thereby forcing most of the investors out of the market.

The events in April last year may continue for the upcoming days but will not perpetuate forever. There simply isn’t enough physical silver available to continue this sort of manipulation. Currently, there is about a billion ounces of silver being traded on a day on the COMEX platform, yet the market only produces 900 million ounces in a year. Given these discrepancies, there will be a real shortage of silver sooner rather than later.

Furthermore, a lot of the speculators were washed out of the market during the crash last year and only the strong hands remained in the market. Many of these investors own physical silver and are unlikely to sell. The buyers of American silver in particular have been known to hold on to their metal for a very long time, sometimes for years or even decades!

The investors will need to be wary of the fundamentals before investing in silver. They will have to avoid the crash vis-à-vis July 2011. Stay alert!

Note: The blog is an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.