Silver and the China Factor

While being invested in silver can be a waiting game, China may help to shorten that wait. The growth of the Chinese economy has allowed more of its population to invest its new found wealth. The new China encourages investment in precious metals. This can have quite an impact on a tight market, such as silver. In fact, China may actually drive the market.

In 2009, the Chinese government started to encourage its people to invest in silver. A law was passed that prohibited the export of silver from China. With a population of 1.3 billion, think of the effect China's silver buyers can have on the tight silver market. Silver has an average worldwide yearly mine production of about 83 million ounces. China alone, could consume this silver through investment.

China's total silver consumption has tripled from twenty years ago. Their use of silver will only grow with the advent of new technology, and increased investment demand. Depleted Chinese silver inventories will have to be replenished, putting additional strain on world production. China's demand for silver could ultimately drive prices higher.

Many silver analysts are calling for silver prices between 25 and 30 dollars an ounce by years end. So far, prices have been hovering around 18 dollars. Realistically, it is just a matter of time for an increase in silver prices. As countries add to the money supply exponentially, this will only add to upward pressure. A spike in silver may be on the immediate horizon.

China has now become the third largest producer of silver in the world. Worldwide investment demand has shot up over 500% since 2007. As China fast becomes an economic giant, many may soon reap the rewards of an increase in the price of silver. Remember to buy your silver now, before the price becomes too expensive. As of now, silver is the investment of a lifetime.