LONDON (Commodity Online): This is the season of silver. A historic price rise in food products has seen almost all the essential commodities across the world shoot up in the last one year. The commodities boom has been led by the hottest among the commodities—gold and silver.

While investors in gold have been on a winning spree in the last two years, it is silver that has shot to limelight in the last one year. Silver price has more than doubled in the last one year, leading to analysts to suggest that silver investment will outperform investment in gold and other commodities in 2011.

Last week, the buying spree in silver led to the white metal prices to jump to a 30-year high at $33.30 an ounce and in a continuation of the trend, spot silver prices were up further in early trade on Monday, making yet another high of $33.44/oz.

Silver is now up 16.77 per cent in the past 30 days and according to traders, has more than doubled in the last one year, trading as it was at $16.24/oz on February 27, 2010.

Emerging economies of China and India are both heavy consumers of the metal, which is used in jewellery but also has its use as a raw material for industrial use.

Compared with this, gold prices have gone up by less than 6 per cent in the past 30 days and according to data sourced from goldprice.org, the yellow metal is up by just 26 per cent in the last one year.

This is now leading to precious metal analysts to argue that silver will see much more appreciation in the months to come, especially since the extent of global silver reserves are debatable.

“Robust international demand, financial and political instability across the world, and concerns over remaining reserves all harbour well for the price of silver,” said a Mumbai-based wholesale trader of silver. “Silver is the new gold,” he said.

According to precious metals expert Greg Holden, the lack of historical resistance lines above where silver currently trades, as well as the thin market of silver traders, means silver prices possesses an above-average tendency to become overextended.

“Silver is also tied with electrical component industries as well as solar panel producers, which have seen rising profits over the past few years on recent hi-tech surges and energy diversification, respectively,” he said.

He says gold’s rising price was fueled by a large market of technical buyers who have been purchasing on dips following the break past $1340 per troy ounce.

“Silver, however, has breached its 30-year high price level, meaning there is little technical data a trader can base his/her trades on from reviewing the charts,” Holden added.

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