Sunday, April 17, 2011

Why is the cost silver going up?!?

Why is the cost silver going up?!?

The other day I bumped into a fellow jewellery artist in town.  Unlike myself, this artist went to school to study the craft and makes a full-time job of it (wouldn't that be fun!).  As a struggling self-taught hobby artist I was shocked to hear that my colleague had not noticed the increasing cost of silver until I pointed it out during our discussion a few weeks prior.  She made note of it this time around and expressed concern over upcoming supply needs.  I can't help but agree.
Silver is breaking new records with the cost rising daily.  No longer the "poor man's gold", the price of silver has increased in leaps and bounds from around $6 to $40 in only a few short years.  Indeed, even in the past 6 months, the cost of a 45 ounce package of silver clay has more than doubled what it was last year. 
Silver is already at a 31 year high with investment trends calling for a further increase by summer to a whopping $48 USD per ounce before a slight market correction and then continuing price increases. 
While some investment analysts attribute this increase to a long delayed price correction, others claim it is the result of demand versus supply problem. 
Unlike gold, silver has an array of uses and is in much demand by industry, artisans, cutlery producers, it’s even found in batteries, solar cells, mirrors, paint and even some medicines! 
Because much of the silver used for these purposes – such as medicines, paints, etc.. – can not be recovered or recycled, a further pressure is added to supply availability.
While the average price of silver has skyrocketed, it’s estimated that silver mine output will only increase at a rate of about 2.5 %.  As beaurocracy lenthens the time it takes to discover a site, obtain appropriate government permits and establishing a fully operational mine, silver supply is not expected to meet demand for many years to come.  
All scary news for jewelry artisans and aspiring metalsmiths like me! 
Even before learning how to create jewelry, cut metal, solder it and watch the beautiful process of melting pure silver (by accident at first but it soon became a fetish!), I have always been attracted to silver.  Gold was pretty and flashy, copper was interesting but it was always silver that compelled me to ouuu and ahhh and finally with trepidation pull out whatever cash I had in my pockets to buy that gorgeous tricket that I simply could not live with out. 
Neverthless, as silver is being touted as the “investment of the decade”, price jumps will inevitably continue to affect the cost of jewelry at both producer and consumer levels.
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