The silver market is relatively obscure and unknown to most mainstream individual investors. So, when considering investing in precious metals, most go for gold, largely because of the recent hype about its prospective returns. Few seem to know that the upswing forecast in silver prices is much higher.

Silver has been used for money throughout history by various civilisations. In several languages, the word silver is a synonym for money.

For centuries, China’s monetary system was based on a silver standard, abandoned only in 1935. From 1949 to 1982, private individuals in the mainland were forbidden to own gold and silver. The 2000 liberalisation of the silver market was one of a number of reforms.

Basic economic theory says the market price of any good is set by the relationship between supply and demand. For silver, growing demand and only slow growth in supply are the fundamental reasons that much higher prices are in prospect.

On the supply side, not many mines that primarily extract silver are in operation today. Most newly mined silver is a by-product of mining for other metals, including lead, zinc, copper and gold.

This means most mining companies that produce silver do not regard it as their core business or main source of revenue. They cannot easily respond to higher prices for silver by increasing their output rapidly or to any great extent.

Central banks do not keep huge reserves of silver like the hoards of gold in their vaults. So they have no big stockpiles to release to control prices when demand rises.