2. Silver does display a high degree of volatility and I believe its fundamentals are far superior to those of gold due both to its industrial usage as well as price. Silver is far cheaper than gold and a lot of investment has been switching over to silver. For instance, Sprott says it sells equal amounts of silver (in dollar terms) to gold, which means in today's numbers, silver is selling 50 times more in ounces than gold.
3. I do think that the gold:silver ratio will get below 20, probably closer to 10:1. It's over 50:1 right now; so, that should be a good guideline.
4. Generally speaking, though, with silver, we are probably somewhere midway through the cycle and have another 10 years to go. Investors should constantly revisit their reasons for being in this space and what exactly they are looking to get from it. I think there's nothing to worry about in the volatile price action. Silver is about the most volatile asset that you can be in. Other than that, I think it is up and up from here.
Read complete article: here.
For quite a while now, I have not really talked about gold, preferring to look at silver because I think the upside for silver is far superior to that of gold over the longer term. I also blogged about the gold:silver ratio before.
Accumulating more silver if its price should test supports would be a good idea.
Related posts:
1. Gold or silver?
2. Buy more silver on weakness.
6 comments:
Hi:
Two questions on silver:
1) If one wants to invest in the metal itself, what is the best way? I think silver bars, right, especially if one is a long-term (i.e. 8-10 years) investor?
2) Also, when you talk about "support price", what is the current thinking of what the best support price is when someone would want to load up and buy lots of bars? I am English so think in Pounds, but if you advise dollars I can convert in my head!
Can you comment on this blog or else email at info at greenworldbvi dot com? Thank you in advance
Hi farmland investing,
Buying gold and silver is to hedge against the inherent flaws of fiat currencies which are not good storages of value. Conventional wisdom is to buy physical gold and silver. Personally, I prefer coins as they are more portable.
There is support for silver at US$30.00 /oz. If that should go, a stronger support is at US$ 26.00 /oz. Buying closer to supports or at supports would be safer. Of course, there is no guarantee that supports would be tested or that they would hold if tested.
Hi Sean:
I completely agree with you on the fiat currency issue, that would be the whole purpose here. My I ask where one might buy silver coins? I hear in the States they have this so-called "junk silver" that are old 10 cent coins before 1965. Or, do you mean modern silver eagles or the like that are just coming out of the mint?
Cheers, Farmland Investing
Hi Farmland Investing,
Who is Sean? ;)
I refer to silver bullions like the Silver Eagles or the Maple Leaves from Canada. You can try buying these online or from your local banks. :)
Hello,
great blog by the way have been reading it over the past couple of days.
i am completely new to investing and was thinking about buying physical gold from uob.
what i do not understand is how does one profit as the rate the bank buys back the gold is much lower then how much the bank sells the same amt of gold.
ive read on another site that uob would buy the gold at a small discount to the spot price. how can one calculate this spot price? is this spot price calculated by going to a site like forexpros.com and converting the usd/troy once to sgd?
sorry for the lengthy question, your help would be greatly appreciated.
thanks :)
Hi Newtoinvesting,
I buy gold really as a store of value and as an insurance against possible failure of fiat currencies.
In a country with a strong currency like Singapore, the case for holding precious metals is somewhat weaker compared to countries like the USA.
If you want to look at the spot prices of gold and silver, you could visit Kitco's website.
The spread between the buy and sell prices at UOB is very big because there is a 7% GST included. This is something all of us found objectionable.
Our government has finally woken up and has decided to do away with the 7% GST for purchase of investment precious metals come October this year. Then, the spread would be smaller.
Hope this helps. :)
Post a Comment