Written by Profit Confidential   

The situation today paints a picture of escalating gold prices; with one ounce of the yellow metal costing nearly $1,700. As a result, small investors have started favoring silver, which is relatively cheaper at around $32.00 an ounce. Therefore, the demand for silver is heavily on the rise.

Some time ago, the stock of the Silver Eagle coins in the U.S. Mint had depleted. For this reason, the sales of these coins had been halted. As per the U.S. Mint, the month of January witnessed an appreciable sale of silver; to the tune of 7.1 million ounces. In fact this was the highest level since January 2012, when 6.1 million ounces of silver were purchased.

There is a high fervor for silver, as indicated by the Vice President of a retail coin dealer firm Blanchard and Company, Inc. He informs that clients are enquiring and buying silver in substantially vast quantities; some are even going for the U.S. Mint-sealed-500-ounce boxes. (Source: Reuters, January 29, 2013).

The Royal Canadian Mint, or the RCM, is experiencing the same upswing as regards purchase of silver. With the extremely high demand for its Silver Maple Leaf coins, it is controlling the sales of the same by careful supply-management that guarantees delivery to all its bullion distributors and the continuation of all further orders. (Source: Kitco News, January 25, 2013).

Most investors of silver find its purchase being well within their means. Similarly, the central banks have the funds for the purchase of gold. Thus both silver and gold will be constantly in demand as long as the Fed in the U.S. continues with its money-printing strategies and creates dollars in excess; thereby inviting inflation to rule the economy. Of course, the U.S. dollar will have to stare at its own persisting devaluation, even as the Federal Reserve spends $85.0 billion per month to buy mortgage-backed securities and government bonds out of the money created from the quantitative easing rounds.

Other nations around the world too are not far behind. Even their central banks have joined the money-printing game. Japan, South Korea, Russia, etc. are some of them.

Silver is a close follower of gold as far as the prices of both are concerned. An increase in the price of gold implies that silver prices will also follow suit, but with a comparatively high percentage. In the year 2011, silver had almost touched $50.00 an ounce. Presently at $32.00 an ounce, if the demand for silver continues and grows, it may well realize its former $50.00 per ounce level again.