Silver has had a relatively rough day in the market today, leading to many bearish calls on the value of the precious metal. However, I don't believe that now is the time to be bearish. In fact, I believe that today's declines on silver will likely open the door to strong gains that will happen either tomorrow or the Thursday. Today, we'll talk about why I'm so bullish on silver and how binary options traders can take advantage of the trends that are likely coming…
Why I've Got Such A Bullish Opinion Of Silver
Silver, like any other commodity, is largely dependent on the supply of and the demand for the commodity. When supply is down and demand is up, silver spikes. Adversely, when supply is up and demand is down, the value of the precious metal will decline. So naturally, my bullish opinion on the value of silver is largely rooted in the basic idea behind supply and demand. Here's how I see it…
Supply Of Silver
The first part of the all-important equation that dictates movements in the price of silver is supply. So, let's start there. When you think of silver production, chances are that you're thinking of silver mines. However, that's not necessarily where the world's silver is coming from, at least not most of it. The truth is that silver is largely a bi-product of zinc and lead mines. The precious metal can also be found in copper and gold mines. This is a very important fact to understand. That's because if zinc and lead mines aren't as productive, production in silver will fall, hurting supply. Well, that's exactly what we're seeing, The truth is that zinc, lead, copper and several other commodities have fallen in value to crisis levels. As a result, mines that focus on these metals are dropping off like flies, and if these mines aren't running, there's not as much silver being produced. The reality is that silver production is declining, and that's likely to put a strain on the supply of the commodity relatively soon.
Demand For Silver
The second half of the equation to pay attention to here is demand, and when it comes to demand, we're seeing quite a bit of strong activity. The reality is that silver is considered to be a safe haven investment. So, when the economic or market conditions of the time are concerning, we can expect to see gains in silver as safe haven demand climbs. Well my friends, take a look around. The overall opinion of the market is nowhere near as strong as it has been in the past. When we look at the global economy, we're seeing more of the same. Central banks are moving interest rates into negative territory to save their economies, the US can't seem to increase its rate, and several economies continue to struggle. The bottom line is that safe haven demand is reaching incredible highs, and that's likely to lead to gains in silver.
How Binary Options Traders Can Take Advantage Of The Trends
As binary options traders, our job is relatively simple. All we need to do is spot trends in the values of financial assets and exploit those trends to generate a profit. In the case of silver, the trend is relatively easy to spot. The commodity has been climbing in value for the most part of the year, and for good reason. Not to mention, the gains are likely to continue. So, binary options traders should be watching silver for strong call option opportunities in order to ride the trends up to the profits.
What Do You Think?
Where do you think silver is headed moving forward and why? Let us know your opinion in the comments below!
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