Can Google Trends Predict the Price of Silver?
Gold and silver started a massive bull market in 2001. There are many people who are aware of this. So we thought, what if there is a way to measure the interest in gold and silver? How could you quantify the desire and interest of millions of people?
After attempting to answer that question in a previous post, Can Google Trends Predict the Price of Gold?, the response from our readers was outstanding. So, here is a similar analysis on the price of silver. Look at the following chart.
Here is the search volume on Google Trends during the same period:
As you can see, the search volume has gone up by about 50% since 2007, but it doesn’t seem to be very well correlated the price of gold. So, here is another Google Trends chart for “buy silver”.
Here we see a similar pattern to the search volume for “silver price”, but without the large spikes. In this case there is an increase of about 50% from 2007 to 2010.
So, after checking various search terms, I did not find any good predictors for the price of silver. One reason for this may be that the public interest in silver is much lower than in gold. Comparing the search volume, gold is 2-3 times as popular as silver.
Also, silver is not nearly as popular an investment as gold. So, perhaps most of the people who are searching for silver are not interested in buying it, while many of the people searching for gold keywords are interested in investing in it.
So far, Google Trends was not very useful in predicting the future price of silver. However, Trends is just one source of such Collective Intelligence, and it seems clear that there are better sources that will be more useful.