Forget Gold, This Silver Fund Has 90% Upside

Another important industrial use for silver is in batteries. Silver oxide batteries have twice the capacity of traditional lead batteries and have begun to replace lithium-ion batteries, especially in mobile devices. Although more expensive, silver oxide-based batteries are being adopted due to growing environmental and safety concerns surrounding lithium-ion batteries. With the geometric increase of handheld mobile devices globally, expect this trend to continue.

Risks to consider: Outside of being a short-term trade, investing in SLV is a long-term contrarian play. Like the GLD correction, the SLV sell-off is motivated by fear and concerns that the Federal Reserve’s long-term quantitative easing program will keep interests rates and inflation suppressed indefinitely, thus making any mobility in hard currency prices difficult. Once the gain from the technical bounce is achieved, SLV may move sideways for a while until the market’s awareness of the industrial demand catches up.

Action to take –> SLV shares are attractive just below $22. Expect a 45% rally to around $32 to follow suit with a technical bounce in gold over the next 12 months. However, shares should hold their value thanks to increased global economic growth and the need for silver as an industrial component. That being said, shares could rise to $42 over the long term. That’s a total return of 90%.

This article was originally written by Adam Fischbaum and posted on StreetAuthority.

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