Investing in Silver
Here’s the deal. Silver has been making a run upwards lately.
If you think it is due for a downward correction then check out ZSL. ZSL14.36-0.38-2.58% ProShares UltraShort Silver
If you however believe the price will keep going up then check out SLV. SLV45.70-0.13-0.28% iShares Silver Trust
IF YOU HONESTLY THINK YOU SHOULD INVEST IN SILVER you probably ought to read some of the articles on the following websites. http://en.wikipedia.org/wiki/Silver_as_an_investment
Find out all about the silver/gold ratio here: http://www.rapidtrends.com/silver-to-gold-ratio/
Or read this article from the following website: http://goldandsilverblog.com/historical-gold-silver-ratio-predicts-silve…
Here is the article.
Silver/ Featured, Gold, Silver/ Historical Gold Silver Ratio Predicts $100 Silver Price
Historical Gold Silver Ratio Predicts $100 Silver Price
March 2, 2011
The gold silver ratio chart below shows the dramatic fashion in which silver has been outperforming gold since last August. The gold silver ratio is calculated by dividing the price of gold by the price of silver. A declining gold silver ratio indicates that silver has been outperforming gold. The gold silver ratio has declined from 65 last summer to a current level of 41.
Since August 2010 gold has moved up 22% from the $1,175 level while silver has soared 92% from the $18 range. Does the declining gold silver ratio indicate that silver prices are due for a correction or is this a fundamental change in the price relationship?
The gold silver ratio has averaged around 60 since the mid 1970’s. In January 1980, as silver hit its peak price of $48.70, the gold silver ratio briefly hit 16, but rapidly rose as the Hunt brother’s attempt to corner the silver market came undone and silver prices collapsed.
Will the current decline in the gold silver ratio continue? From a very long term historical perspective, a gold silver ratio in the 16 range has been the norm. Since ancient times, it has typically taken 16 ounces of silver to purchase one ounce of gold. Interestingly, the earth’s reserves of silver exceeds that of gold by roughly 16 times. If this ultra long term relationship were to reassert itself, silver would sell for approximately $90 per ounce based on the current price of gold. With gold at $2,500 per ounce, silver would have a value of $156 per ounce at the historical gold silver ratio of 16.
The fundamental reason that may drive the gold silver ratio back to the 16 range is growing demand by small investors. Silver, known as the poor man’s gold has seen a huge surge of public demand, as evidenced by record sales of the Silver Eagles.
Increasing public recognition of the need to preserve wealth against paper currencies will continue to propel silver to historic highs. Simply put, silver is more affordable to the average buyer who cannot afford the higher priced Gold Eagles. Silver has a lot of catching up to do and we are probably in the early stages of a fundamental reversion to a lower gold silver ratio which will send silver prices soaring past $100 per ounce.US Mint Silver Bullion Sales Set Monthly Record
February 3, 2011
The pace of sales for the United States Mint’s American Gold Eagle and American Silver Eaglebullion coins jumped in the past week. This propelled silver bullion sales far into record territory for the month of January.
Currently, the US Mint offers only these two options for precious metals investors. The American Gold Buffalo, struck in 24 karat gold, has been unavailable for several months. The American Platinum Eagle remains on indefinite hiatus since late 2008. The recently introduced America the Beautiful Silver Bullion Coins are now in production for the 2011 designs, following the rapid sell out of the previous year’s coins.
Here is how individual investors can purchase actual silver coins. 2011 America the Beautiful Silver Bullion Coins Release
April 18, 2011
On April 25, 2011, the United States Mint will make the first of the 2011-dated America the Beautiful Silver Bullion Coinsavailable for purchase. This year’s release and distribution of the 5 ounce silver bullion series is expected to be much different than experienced for the previous year.
As with other bullion programs of the United States Mint, the coins are distributed through a network of authorized purchasers. A group of primary distributors may purchase the coins directly from the Mint in bulk quantities based on the market price of the metal plus a modest premium. For the 5 oz. ATB silver bullion coins, this premium is $9.75 per coin. After acquisition, the authorized purchasers resell the coins to other bullion dealers, coin dealers, and the broader public.
For this year’s offering, the US Mint will start by releasing two different designs featuring Gettysburg National Military Park and Glacier National Park, each with a mintage of 126,500 units. This will be followed by three additional designs released later in the year featuring Olympic National Park, Vicksburg National Military Park, and Chickasaw National Recreation Area. The US Mint has stated that their goal is to produce a minimum of 126,500 coins for each of these designs.
You can buy Silver Eagle coins from this U.S. Mint authorized dealer. http://bullion.nwtmint.com/silver_americaneagle.php
Well there it is; all you need to know about purchasing silver as an investment. Personally, I’m sticking to dividend investing. Maybe I’ll buy a couple of Silver Eagles just because they are real pretty coins.