“I think silver will be the investment of this decade, whereas gold was the investment of last decade,” Eric Sprott of Sprott Asset Management said in a recent Russia Today interview.
Looking at US Mint sales in 2011 and 2012, Sprott said that silver and gold coins have received the same amount of investment dollars. That means investors are purchasing 53 percent more silver than gold.
Sprott added that his own firm raised $320 million in the final tranche when it issued its silver trust compared to $349 million raised for gold a few months earlier. “We bought 50 times more silver for investment purposes,” he said.
Sprott maintains that the current level of demand for silver cannot continue without it having an impact on the market. When silver is available seven to one, investors cannot keep buying it 50 to one without causing something to happen, Sprott said.
The allure of silver prices
A lot of silver's attraction stems from the fact that it trades based on many of the same fundamentals as gold, but is much more affordable than its yellow peer. Investors around the globe are taking note of this fact.
Major metal markets, which are known for their large gold appetites, are increasingly turning their sights to the white metal. Last October, The Wall Street Journal reported a notable shift in focus from gold to silver among Indian investors, identifying silver's apparent undervaluation as a primary reason for the switch.
Demand has also surged in China. China's appetite for the white metal has made it the world's largest silver market, according to the Silver Institute. As demand has grown, so too have the product offerings that give investors accessibility to the market.