Best Ways to Invest in Silver 2012
Best Ways to Invest in Silver 2012
Firstly silver is not just a precious metal but has huge demands from industry.
Secondly supply & demand: the vast majority of gold that is mined is saved as bullion as a hedge against inflation/ safe haven when currencies, especially the $US are struggling.
In 1950 it is estimated that there were 1 billion ounces of gold above ground & in 2010 still 7 billion ounces.
Most silver on the other hand is not hoarded but used for a myriad of industrial purposes, these include circuit boards, batteries, soldering, mobile phones and computers, catalytic converters, water purification, clothing, high tech bandages and the explosion in the use of photovoltaic solar panels. To emphasise the point, industrial demand for silver was up 18% in 2010 compared to 2009.
Thirdly, the gold silver ratio. The highest gold ratio was nearly a 100 in 1939 at the outbreak of the second world war & at its lowest the ratio was 15 to 1.before returning to the average of the 20th Century of between 47 and 50. More recently during the financial crisis of 2007 – 2008 the ratio climbed to 80 and then fell to its current value fluctuating between 40 to 60.
What of the future? An extended commodity / precious metal bull market usually sees the GSR fall. This means now is a good time to invest in silver whilst it remains relatively under-valued against gold, and still around the historical GSR average of 47 to 50. There is also the argument that in the short term the ratio may rise due to current political instability in North Africa and the Middle East, which may drive institutional investors even more to the favoured financial haven in troubled times, gold.
Here are some interesting and informative articles about the best way to invest in silver (and what NOT to buy):
American Eagle Silver Coins
Philharmonic Silver Coins
Is the SLV ETF a Good Investment in Silver?
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