These Three Charts Point to Higher Silver Prices Ahead

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For the past few weeks, silver prices have been trading sideways. Kitco notes this tight trading range "could be "basing' action that can put in market lows and occurs just before an uptrend begins."

For those investing in silver, that's great news.

And if you don't think silver prices will go higher this year, here are three charts showing otherwise.

Higher Silver Prices and Soaring Investment Demand

Recent and ongoing events like sequestration, central bank easing, devalued currencies, and the Cyprus bailout have increased investor demand for metals, especially silver.

While 2012 sales weren't as high as 2011, buying picked up in earnest in the final months of the year as investors raced to protect their nest eggs amid fears of a U.S. recession. As the pace picked up, the Mint ran out of silver eagles in December 2012, forcing it to announce there would no more coins until 2013.

In fact, in 2012 the U.S. Mint's silver coins sales sold 33.7 million ounces of silver - more than the 33.5 million ounces produced from U.S. mining operations, according to the U.S. Geological Society.

Sales of the popular 2013 American Eagle silver bullion coins that went on sale to the public on Jan. 7 sold out by Jan. 15. Thanks to surging demand, sales exceeded 6 million ounces in a little over two weeks.


Source: U.S. Mint

As a result, the Mint was forced to suspend sales after it ran out of stock. When sales resumed, the buying was unprecedented.

January 2013 sales, at 7.1 million ounces, shattered the previous record set in January 2012 of 6.1 million ounces. The increase was an impressive 16.39% year-over-year.

The majority of sales came in the form of a box of 500 one-ounce silver coins the mint offers. This suggests investors are not simply stockpiling the coins as a collectible, they want "insurance" against a market crash or economic turmoil.

And it's not just the United States -- bullion dealers the world over report robust silver demand.

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