After peaking at $51.52 in April 2011, silver has been on a precipitous slide to its current price of $14.61. The precious metal has had a poor run over the years except for January 1980 when it peaked at $107.89. Of course, these are inflation-adjusted figures, but they are important yardsticks to understand precisely how much silver has been traded for in real money terms. While silver trades for just a fraction of the gold price, it mimics the behaviour of gold in most ways. If you take a look at the chart below, you will notice that there are shaded areas. These indicate recessionary periods in the global economy. As the recession approaches, it is evident that the demand for silver and the price rises accordingly. This is due to the nature of silver: it is a go-to asset during times of geopolitical and economic uncertainty. While silver does not hold its value quite as well as gold, it is still considered a store of value to a lesser degree.

Silver at Historic Lows

If we narrow our focus to the last five years, the price of silver has been largely disappointing. In April 2011, the price of silver was $51.52 and in the years since then, silver has plummeted to trade at just 28% of that price. That silver is now at its lowest level since 2009 is an important point to bear in mind. Most analysts, myself included, would tell you that when a commodity or a stock or an index is trading near its bottom – this is the right time to buy. But where is the bottom precisely? Is silver going to fall further? Has the market bottomed out? How will ECB policy, Bank of Japan policy, Bank of England policy or the Fed decisions vis-a-vis interest rates impact on the price of this precious metal? These and many other considerations need to be factored into any investment decision. It is also true to a lesser degree with trading-related activity. The difference with trading is that there is an opportunity to generate a nice return in next to no time at all, notably with binary options silver trades.