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Is the silver surge sustainable?

Tuesday, February 28th

Silver has been about the best performing metal commodity so far this year, currently fetching more than 25% more than it did at the close of 2011 - not a bad performance in a short couple of months! However the big question for silver investors is whether its current rate of progress is sustainable - and depending on who you listen to for advice it's a tough call.

Firstly, on a pure supply and demand basis, the position is controversial. On the face of things there is plenty of potential silver supply out there, but even so the fundamentals are basically unchanged from this time a year ago when silver was roaring up to new highs, before it came crashing back down on what has to have been a very nasty bit of market manipulation presumably by those who could have lost a fortune in over-large short positions. The silver commodity market is small enough to be manipulated in this way by those with big enough pockets which is why it can be such a dangerous metal in which to invest.

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