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Silver Surge?

Silver Surge?

Although currently in a bear market, silver is expected to rebound by the end of this year. The commodity has performed well last year even while it experience periods of volatility. For the remainder of 2012, however, speculation favors silver.

The precious metal may rebound because of emerging markets. China in particular is a driving force in the metal’s potential price increase. China is growing rapidly, and the growth means that they will consume much more silver in the coming months. The rebound in silver sales is also due to the price. Silver is priced much better than gold, making it much more appealing to the average investor.

While both gold and silver have performed well this year, silver has experienced the widest swings in value even as it reported an excellent overall return. Silver has shined with 104% gains and tarnished with 28% losses (in September 2011), but overall, it has returned 34% in the last year.

The last three months of 2011, silver is projected to rebound from just under $32 to a potential of $42 per ounce, balancing out with an average of $38.

Even so, the projections could be faulty. The total world economic growth may not support the mine production numbers. The mines are expected to continue to produce at an accelerated rate while world economic growth is not expected to keep up at the same rate. Additionally, if the world economy backslides into recession again, the silver surge could slump.

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