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Silver is on the rise, according to recent research from the Silver Institute. Prices for the precious metal have risen by roughly 9 percent since January, signaling prolonged growth in the market. Analysts for the organization have attributed the price increase to strengthening investment among institutional buyers. Of course, this is not a surprise to those who tracked institutional silver purchases last year, as such transactions held up the market, which came under considerable pressure from external economic and political forces. Why did these purchases make such an impact?
Institutions often have access to large sums and therefore can afford to buy metal in bulk. For example, the University of Texas bought $500 million in gold during one single transaction back in 2011, Business Insider reported. This purchase typifies the institutional precious metals market, where large organizations make big moves – so large, in fact, they can tilt prices. Analysts for the Silver Institute expect institutions to continue to invest throughout the year, a development that would bode well for the commodity.
"Silver is on the rise, according to recent research from the Silver Institute."
Industrial firms also got in on the silver trade in 2016. These companies have historically consumed roughly 50 percent of the total supply, Henry To, chief investment officer for the global financial services firm CB Capital Partners, wrote in an article for Forbes. They use the metal to make a variety of products, including electronics and solar energy systems. Last year, many upped production targets and therefore invested more heavily in the requisite raw materials. A number of new trends are expected to drive the industrial sector forward in 2017, according to Fidelity investments. This includes the rise of large-scale infrastructure projects – especially in the U.S. – and the continued growth of the Internet of Things.
Currently, silver is selling for $17.58 per Troy ounce. With the above forces in play, the precious metal is likely to reach new heights over the coming months.