INSTITUTIONAL BUYING: The Coming Silver Game Changer
In 2004 the price of a barrel of Brent crude was $38 and silver was $6.67. Today the price of silver is $20.50 and Brent crude trading at an average $110 for the past month. Basically, the price of both have tripled in the past decade:
Brent Crude = $38 X (3) = $114
Silver = $6.67 X (3) = $20.01
The market price of silver is keeping pace with the percentage increase in the price of oil. This seems to be how the market is currently pricing silver.. same with copper. The price of copper was $1.25 lb in 2004 and in 2013 it averaged $3.30 lb.
Copper = $1.25 lb X (3)= $3.75
Of course there are many additional factors that go into pricing a commodity, however we can see that the price of energy is good indicator in finding a base guideline.
This should give the silver investor some reassurance that the average price of silver will not fall much in percentage terms below its present level. I say average because short-term movements in price can be highly volatile. A perfect example of this is the price of Brent Crude.