Silver has hovered around the $7 an ounce mark for the past six months. But the uptrend of the past two years looks far from over. Demand has exceeded mined supply for the past 16 years. Since the late 1990s, the gap has been plugged by stockpiles held by the Chinese central bank, which are now widely thought to be close to depletion. Boosting supplies rapidly won't be easy, as there are few primary silver mines in existence silver is largely a by-product of base-metal mining.
A slide in demand for silver, owing to the advent of digital photography, should be offset by the need for silver in other industrial applications as China and India improve their standard of living. Silver is used in fields from medicine to computer technology, and a rising price shouldn't choke off demand, as the metal rarely comprises a large proportion of the end product's cost.
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