Silver prices dropped along with all other commodities in the summer of 2008, but have rebounded steadily since then, reaching $19 per ounce in December 2009. This is still short of its high of over $20 in 2008, leading some analysts to believe that silver is undervalued and has upside potential.

Generally, silver prices tend to align with the growth of the industrial sector, which accounts for approximately 50 percent of silver demand. While investment buying typically comprises a much smaller portion of total silver demand, it would appear now that investors are increasingly turning to the metal as a store of value and safe haven asset. Presently, silver appears to be trading more as a monetary metal, with drivers closer to those for gold, than as an industrial metal. However, silver has demonstrated much more volatility than gold, tending to trail gold’s movements on the upside but outperforming and subsequently overcorrecting on the downside.