You may as well call it the coolest metal; silver boasts the highest thermal and electrical conductivity among all known metals. In simple words, its distinguishable as the metal that would heat up least for a given measure of heat passed through it.
But when it comes to international prices of the poor mans gold, they play anything but cool. A survey of silver prices since the 1930s to the present day shows that they move in tandem with gold prices. But although silver tends to move in the same direction as gold, fluctuations in the price of this metal have historically been much more pronounced than those in the yellow metal.
Investors dabbling in silver have been facing the heat since the beginning of this year. Its price has tapered from about $30 per ounce on January 1, 2013 to just under $23 per ounce on Wednesday and is currently sitting near the two-year low level.
But given its propensity to trail gold prices and the waning outlook for the yellow metal, it seems that investors in silver are in for a harsher scathing in coming months. In an article titled, "After the Gold Rush", renowned economist Nouriel Roubini contended that the gold bubble has burst and that its prices will "move much lower, toward $1,000 by 2015."
An earlier article in the Financial Times, published on May 20, 2013, had highlighted that US data on investor positions on futures markets "reflected the increasing negative sentiment surrounding gold and silver." That article highlighted that short positions on silver are increasingly dominant in US futures markets.
As usual there are bulls and bears when it comes to an outlook for prices of the precious metals but the latter seem prevalent at the moment. The reasons for declining gold prices are plentiful; from deflationary risks and freshly introduced restrictions on physical gold imports in India to the pre-dominance of short positions on gold futures contracts in US markets.
At present the state of the US economy appears to be the dominating factor in determining future trend of gold and thus silver prices. Roubini reminded his readers that "unlike other assets, gold does not provide any income." He has predicted a shift of investors towards other productive assets as the US and other economies recover.
If such a shift is seen in coming weeks and months, gold may lose some of its lustre. But given silvers track record of much more pronounced volatility, it will be investors in the devils metal that could be howling in pain.
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