Silver Demand

Gold and Silver Prices to Spike Next Week

Gold and Silver Prices to Spike Next Week

Gold and silver prices have remained volatile in both directions since October. But indications from the COMEX show suggest we may see a spike in these precious metals prices next week… As prices moved higher over the past two weeks, strong bouts of profit taking have hit the gold and silver markets in each instance, stalling the next attempt to hit another new high. World Gold and Silver Demand World investment demand for gold has increased 250% in the past ten years. Investment demand for silver has skyrocketed 522% since 2007. Sales of official gold coins (like the American Gold Eagle) have increased 618% since 2007. World governments are hoarding silver; official sales have plummeted 83% in the past three years. Gold demand for ETFs has increased 20,470% since 2002. Above-ground silver supplies dropped 86% last year. Industrial demand for silver has increased over the past decade, despite a 236% increase in prices. On the downside action over the past two weeks, strong buying support has come in as precious metals prices looked like they were going to sell off — thus our current holding pattern in gold and silver prices. This will change to the upside within the next two weeks as major buying of physical metal will need to take place in order to meet contractual obligations on the COMEX before December 31, 2010. Contracts for gold and silver December futures that demand physical metal must be met by then. But there appears to be a significant shortfall in the actual physical metal required to meet these demands — especially in silver… If these contractual obligations are not met by the 12/31/10 deadline, then we could see a default scenario, which would drive the metals prices even higher and cause great instability for other markets as well. This potential default is due to the fact that JP Morgan Chase, the largest fractional stock holder of the Federal Reserve, has been wildly shorting silver and is now caught between a rock and a hard place. Word on the street is that JP Morgan Chase has opted to go massively long copper in an attempt to hedge their losses in silver, which could be enormous. This is…

Continue Reading »

Five Gold Investment Alternatives

Five Gold Investment Alternatives

Gold prices are soaring. Last month, the price of gold breached a new all-time record high of over $1,387 an ounce. But with gold increasing almost 20% in three months, speculators concerned with a correction in prices may want to consider other hard asset commodities as an alternative investment. So with that in mind, today I bring you five hard asset alternatives to gold to consider. Five gold investment alternatives Gold is a commodity. As such, the yellow metal derives a large part of its value from the balance of supply and demand. The majority of the world’s supply of gold comes from mining (58%) and recycling (42%). Meanwhile, global gold demand is dominated by the jewelry and investment sectors. The applications, market, and dynamics of its supply-demand balance make the first investment alternative to gold obvious. Gold Investment Alternative #1: Silver and other precious metals Like gold, world supplies of silver and other precious metals — including platinum and palladium — are dominated by mine production and recycling. In the case of silver, 80% of global supplies are mined while 19% are recycled. Meanwhile, worldwide supplies of platinum and palladium are more dependent on recycling and stockpiles. Unlike gold, the demand for silver, platinum, and …

Continue Reading »

China’s Silver Bull Market

China’s Silver Bull Market

A Chinese silver bull market is about to make history. And with the world’s largest population, increasing silver demand for investment and manufacturing could help drive prices worldwide — and spur significant gains for companies with silver assets in China. The Chinese have used silver as a monetary unit for over a thousand years. But it was until only recently that China’s silver sector was opened to investment. And now, thanks to de-regulations of the silver market, China has become one of the premier silver mining countries in the world — with booming global investment interest. Under the Mao Zedong administration, the Chinese government imposed strict controls over the silver market beginning in 1949. This made the private purchase of silver bullion illegal. And it prohibited international companies from any ownership or rights to develop mineral projects in the country. This meant China’s silver resources could not be fully explored or evaluated with modern techniques. But after Mao’s death in 1976, the Chinese moved away from a state-controlled economy. And over the next three decades, China loosened the reins on the silver market and deregulated its mining sector, piece-by-piece. 5 Global Reasons to Invest in Silver Now Investment demand for silver has skyrocketed 522% since 2007. World governments are hoarding silver; official sales have plummeted 83% in the past three years. Above-ground silver supplies dropped 86% last year. Industrial demand for silver has increased over the past decade, despite a 236% increase in prices. Silver outperforms gold during bull markets. Today, the country has streamlined the permitting and approval process and allowed silver companies to advance projects faster than many other countries in the world. As a result, foreign investment has transformed the Chinese silver industry in the past ten years, turning it into the third-largest silver producer in the world today. Since the de-regulation of the market, rapid economic growth boosted demand for silver — needed in everything from investment bullion and jewelry to electronics, photography, and silverware. Rising personal income levels and a higher standard of living for billions of Chinese is expected to continue increasing silver industrial demand in the country…

Continue Reading »

Why Silver will Always Beat Gold

Why Silver will Always Beat Gold

If you’re like most Americans today, you’ve grown tired of hearing words like “inflation”, “national debt”, and “credit crisis”. For years now, it’s been hammered into your brain — the fact that your government has been writing checks it can’t cash, and in the process, diluting every cent you’ve managed to store away in your savings account. And for almost as long, you’ve probably been hearing financial advisors and so-called economic gurus telling you about how certain investments can protect you during these times of uncertainty. Without a doubt, recent historical rises in gold prices have gotten your attention; made you think. Maybe you’ve even started to view the jewelry in your house more as currency than personal possessions. Perhaps you’ve even thought about buying some gold yourself… Turn some of those depreciating dollars into stable wealth by locking in at a good price. Well, let me stop you right there. Although gold is historically the most prominent method of storing and transferring wealth, there’s a reason why men like George Soros, Warren Buffett, and Bill Gates have invested heavily in its slightly less glamorous cousin… I’m talking about silver. Actually, there’re a couple reasons why right now — more than ever before — silver is not just the superior hedge against inflation… But a serious profit vehicle in its own right. And today I’m going to tell you why. The Magic Ratio If you average out the price ratio between gold and silver throughout history, you land on a single magical proportion: 16 to 1. And even experts who do not subscribe to fixed pricing relationships generally agree that a price ratio of around 20 to 1 should be considered normal. What is not normal is the current ratio of — wait for it — 66 to 1! To investors, this means one of 3 things: 1.) That gold is overvalued; 2.) That silver is undervalued; or 3.) A combination of the two. Any way you look at it, silver’s price cannot be predicted to drop in any of these scenarios. And since these same experts are continuing to predict gold’s rise towards $2,000, a realistic target price for silver should be between $100-$125/ ounce. Already, that’s over a 500% gain over today’s price of $18… Silver’s Two Faces Silver isn’t just a precious metal; it is also one of our main industrial metals. One of the most conductive substances known to man, it’s used in everything from photography, to compact discs, to semi-conductors, to medical equipment. Basically, if something is high-tech, it contains silver. The metal’s so heavily used, in fact, that for the last several decades, the world’s total silver supply has barely been able to keep up with demand — even though the 20 th century saw historic production increases. Demand ramped up in the last quarter of the 20 th century to the point where, for almost two decades (between 1998 and 2007), silver was in a fully-fledged global deficit. It wasn’t until the worst economic…

Continue Reading »

Citigroup (NYSE:C) Sees Silver Outperforming Gold

Over the medium term, Citigroup (NYSE:C) says silver prices could outperform gold prices, as industrial demand for silver continue to rise. Citigroup analyst David Thurtell said this, “Gold is likely to encounter repeated resistance at the US$1,250 mark over the coming month. The seasonal low period for buying in India is upon us, which will take some of the heat out of the market.” Over the

Continue Reading »