With the current spot silver hovering around the $31 per ounce mark silver is a bargain investment. While gold is usually in the news, investors should not forget about silver. If you are a small investor and if gold at $1600 per ounce is out of your reach invest in silver. It offers similar hedge properties as gold, yet often performs better than gold. You will not find a better bargain priced investment than silver.
Silver has one noticeable difference when compared to gold, it is more volatile. The spot price of silver can swing high or low sometimes without apparent reason. However, this opens the door for another kind of investing. Speculative investing can be very profitable when timed just right. Consider that silver is expected to peak at $40 per ounce this year. If you buy the metal at the current discount price there is the potential of garnering huge speculative profits.
On reason silver is currently undervalued is the dollar is stronger than most other world currencies. This has kept gold from soaring in price too. In addition, industrial demand is down worldwide, except in China. However, there is encouraging news regarding India’s exports of silver jewelry to the US and to Europe. Their exports are on the rise at the expense of gold jewelry.
There is enough financial turmoil in Europe to keep silver’s price around the $30 per ounce mark, with spikes up to $40 per ounce in 2012. While some do buy silver jewelry for investment purposes silver bullion might be the better choice. Bullion bars are popular with large investors who have the storage capacity to invest in bars. Silver bullion coins like The American Silver Eagle are also a great and convenient way to invest in silver.
The very fact that silver can be bought for so little is an investment opportunity, because silver will increase in price. It always does. With the EU facing recession this will keep silver high and help it peak. The dollar will remain strong in 2012 meaning silver will not reach that magical $50 per ounce this year. Still silver is worth investing in.
In closing, at $31 per ounce silver is the greatest bargain priced investment around. Since the price is expected to peak at $40 per ounce this year you can reap huge speculative profits if you invest now. Silver investing just makes sense.
This year gold is expected to peak at just over $1900 per ounce with an average price gold of $1730 per ounce. Expectations are down from what many had predicted for this year, however, these prices are still historically high. It is now thought gold will finally break the $2000 per ounce mark in 2013.
Why the change in prediction? There is now a huge supply of gold and the excess could total $130 billion dollars for 2012. In order to sustain that amount of surplus there must be huge investment interest in gold to move the spot gold up. In addition, demand for gold jewelry is down contributing to the failure for gold surge upward, and the stronger dollar has kept pressure on gold as well.
Yet, gold does remain at a high spot price that is almost all thanks to the continued debt mess in Europe. Spain and Britain are now in recession, the US economy while growing is weak, and interest rates continue to remain low. Plus, some believe gold is in the midst of a price correction.
While gold is likely to hit $2000 per ounce next year it will probably be short lived, especially if it occurs later in the year. This is because interest rates are expected to rise in 2014, and this will work against gold. Still, gold will not be in for hard landing if indeed the current bull market ends in 2014. There will be enough bad economic news to keep gold relatively high, and gold will likely have a soft landing at worst.
Even though gold has not taken off as many investors had hoped, it is still is the best hedge going against the down economy and unstable stocks. High oil prices threaten a return of inflation, and investing in gold is a prudent move because of this. If given the choice to acquire dollars, stocks, bonds, or gold, the right option is gold. This metal has protected investors for centuries; it makes no sense to give up on it now.
On the whole, gold is expected to peak at about $1900 per ounce this year, but will probably not hit a new record until 2013. The over-supply of gold, the stronger dollar, and with gold jewelry demand down has kept gold from soaring upward. On the other hand, gold has remained steady and continues to offer a high $1600 per ounce spot price. Gold is still the best safe haven going.
It is always a nice thing when we can find the silver lining to a dark cloud. The fact is that the state of the world as it is today can seem a bit overwhelming sometimes in its gloominess. For several years now we have had to deal with a world wide economy that has been a hardship for many people. During these times, people have lost their jobs, people have lost their homes, and people have lost their financial health and freedom. However, among this great deal of sad news has been those rays of light, those perhaps unlooked for opportunities that we can use to turn our fortunes around and give us our confidence back, allow us to restore ourselves to financial vitality. And among those rays of light, those silver linings to the dark clouds of doubt, are another shining thing, the rising gold price that has been allowing folks to not only protect their personal wealth but to grow and prosper as well.
The truth of the matter is that the gold price has been on the rise over the course of several years. Much of this upward pressure on the value of gold has to do with the fact that this metal, this real and tangible good, is a commodity that people have great faith in. For hundreds and even thousands of years, gold has held a position of authority, being the measuring stick of value by which we determine the worth of many other goods and services. Because gold has the unique ability to maintain its value even during difficult economic times, it has gained this authority of value. Thus, when the economic climate turns for the worse, as it has over the past several years, demand for gold increases as people return to this commodity of trust. This flight to quality quite naturally leads to higher demand for gold and thus to a rising gold price.
This phenomenon of a flight to quality and the resultant upward pressures on the gold price has been demonstrated many times throughout history. In the 1970s, for example, when the nation was dealing with runaway inflation and near historic levels of unemployment, the demand for gold increased, driving prices for the metal higher and higher. Thus, those who had made wise purchases of gold found that not only was their personal wealth protected, they also had gained the opportunity to make significant profits on their gold holdings. For many, the same holds true today.
Many financial and investment experts will agree that you are making a wise investment decision if you opt to buy silver bullion as a means to diversify your investment portfolio. In fact, silver as well as other precious metals such as gold and platinum have become an attractive investment alternative chosen by many investors that do not want to suffer the constant ups and downs and twists and turns of the stock market. Rather many investors have chosen to protect their assets against inflation and have decided to protect their savings from the unstable financial scenarios of the down economy.
There are many aspects you should take into consideration before you buy silver bullion. Among them is the current trend the spot price of silver has experienced lately because it is more convenient to buy silver bullion when the price of silver is low so that you can make a better use of your money. It is also important that you decide which type of silver bullion you are going to buy. There are many options available in the market such as silver coins and silver bars, and you should consider the option that is most tailored to your own financial goals. In addition, it is important to only buy from a reputable silver bullion dealer.
For many investors, relying on the services of a good dealer is the key to buying silver bullion at the best price possible. They agree that a good dealer is much more than just a professional experienced in buying and selling silver and other precious metals, but is also somebody who can provide them with accurate and timely advice regarding which silver bullion product they should buy. In a real sense a good silver dealer becomes your investment partner.
In order to choose a good dealer to buy silver bullion from it is highly advisable to ask for referrals. There is a good chance that fellow investors can recommend to you a couple of trustworthy silver dealers who have impeccable reputations to back up their services.
It is also a good idea to go to the professional board of dealers or any other professional association related to this activity where you can ask for information regarding a dealer in particular or just ask for a highly reputable one near your area. You can also check the Internet because there are many websites and forums where you can learn first-hand the experiences other investors have had with a particular dealer.
You may have heard of “Prooflike (PL),” “Semi-Prooflike (SPL),” “Deep Mirror Proof-Like (DMPL),” or Ultra Prooflike (UPL) Morgan dollars. What do these terms mean and how will they change the value of a coin? Numismatic coin experts label coins with a great variety of terms that either cause the value of the coin to increase or diminish. Understanding these differences will help you in your coin collecting efforts.
To gain an understanding of what category Morgan dollars are put into, consider the common way that the “reflectivity” of a coin is determined. To do this, place a Morgan dollar on its edge next to a marked line on a newspaper page that is full of standard-size text. Make sure that you have good lighting that is aimed toward the coin, but not directly into the coin. Look into the coin’s surface and make a mark next to the text that you can clearly read via the coin’s reflective surface. Based on the length of this reflectivity, you can make a guess at how the coin will be labeled.
If you can only read text that is 1 to 2 inches from the coin, then the coin is likely to be a semi-prooflike (SPL) Morgan. Morgan dollars that are rated SPL will have a frosted surface. Prooflike (PL) coins will have a reflectivity of 2 to 4 inches, Deep Mirror Prooflike (DMPL) coins will have a reflectivity more than 4 inches, and Ultra Prooflike (UPL) coins will have a reflectivity of at least 8 inches.
Be aware that performing this test on slabbed coins that have been encased in plastic or other protective coverings will not provide accurate results. These clear covers tend to significantly alter the reflectivity of a coin.
UPL Morgan dollar coins are rare, and many numismatic experts will argue that in order for a coin to be designated a UPL coin, it must have a reflectivity of at least 12 inches. Some grading services will designate different designations for the obverse and reverse side of a coin. However, most coins will not qualify as Prooflike unless both sides of the coin meet specific standards.
The terms Deep Mirror Proof-Like and similar terms were first developed specifically for Morgan dollar coins since these coins had a uniquely shiny, mirrored surface. The terms were eventually used with Peace dollars as well, and are now being used to describe many additional coins that have bright, mirrored surfaces.
On the open market, you will find yourself exposed to as many differing and contrary opinions as you will have investment options. The occupation the trader equates, at its most basic, to the capacity to make good decisions consistently, 100% of the time, under extreme pressure, when you and those you represent can potentially to lose a great deal.
As a profession, it requires a well-rounded background in math, business, psychology and economics. Which of these deserves emphasis is, again, another topic of contention.
One school of thought on the issue swears up and down that investment is a 100% psychological game, and that all traders behave according to their belief systems about markets rather than how markets work in objective reality. In other words, you do not invest in the market; you invest in hysteria and delusions experienced by other investors with regard to a completely intangible thing known as “the market”.
Such belief would lead you not to the study of economics, but rather to a close attention to the media. We will call this investor the type that invests “by heart.”
Take this hypothetical example: an investor wants to make predictions about spot silver in the future in order to make a profit. Looking at past circumstances, they notice that every time Ben Bernanke says anything quantitative easing, the price of precious metals like silver feels a significant bump in value. They invest accordingly.
Such an investor may even concur with the truth behind the investors are hearing nowadays with increasing frequency: Ben Bernanke secretly invests in the silver and gold markets, and this is why consistently makes gloomy forecasts about a world with no end to quantitative easing in sight.
Regardless of what Bernanke does in his private life, we notice a correlation between his press release and a hike in silver prices. Whether the man is actually a fantastically astute economist some means of super natural mystic, or a flat out crook seeking to make a quick dollar through manipulations makes no difference.
Another trader, sitting at a nearby table in a coffee shop, feels differently. This second investor, we will say, “invests from the brain” instead of the heart. When figuring out how to invest based on spot silver: “Greenback Resumption and Silver Risk”, a paper by an economist named Charles Calamoris.
Calamoris studies trends the spot price of silver demonstrated during the second half of the 19th century. Faith in federal government waned during this period of American history. Like today, this resulted in a highly volatile market. Our “from the brain” investor decides to invest in accordance to Calamoris’ arguments about what happens to interest rates during such periods of time.
Why are there so many people interested in the price gold shows every day? Even though we all know that it is highly advisable to diversify our investment portfolio by adding to it some precious metals such as silver, gold, platinum or palladium, the truth is that most amateur and experienced investors still rely on investing in gold as they consider it a solid refuge not only against inflation but also against the ups and downs and twists and turns of the financial markets.
In fact, an increasing number of investors have already started buying gold bullion coins and bars and have learnt to follow avidly the price gold shows in the different online and offline charts that are available in the market. According to experts, the extraordinary positive tendency that the price of gold has experienced over the last twenty years will not experience any dramatic change any time soon. But despite this good news, many investors are worried about which factors influence the price gold shows. Let’s analyze them.
The value of the American dollar is one of the factors that may alter the price gold experiences. As one of the most important currency units across the world, the American dollar is a worldwide benchmark whose ups and downs and twists and turns do not only make the financial markets shake but also affects the performance of other markets and very important industry sectors. Generally speaking, people have always considered the US dollar as a good investment option and it is their first choice as an investment alternative. However, when this currency unit seems shaky in the eyes of the investors, they turn their eyes to precious metals, especially gold. Thus, when the price of the dollar falls, the price gold shows on charts is usually higher because there is more demand for this precious metal.
Another worth mentioning factor is highly related to the production of this precious metal in itself. As gold is a commodity, the price gold shows in the different charts is highly related to its demand and supply. Therefore, when mining companies have more exploitation costs or have to pay more taxes for their mining activity, the price gold experiences generally suffers an increase in their monetary value. This tendency can even be emphasized by more or less slight changes in the supply and demand for this precious metal. In other words, the higher the demand, the higher the price of gold will be.
In Europe, there is currently a huge debt crisis taking place. Not only does this debt crisis affect Europe, it also has an effect on different areas around the world, including the United States. With the current debt crisis going on, the gold price has also changed as well, which is definitely not surprising for those who already know that the price for gold rises as economic disaster takes its toll. As the currency in both Europe and the United States are faltering, the price of gold has increased, along with various other popular precious metals as well. Throughout the entire year of 2011, the price for gold continuously rose, which was a good thing for those who had already invested in gold products, such as gold coins, gold bars, and gold bullion. Many people have been purchasing gold and other precious metals as a means of investing in something that will not inflate. People are taking notice as the Euro and the Dollar have inflated and they are finally realizing that while these types of currency may be inflating, gold is not inflating and is still highly valuable.
Investing in gold is definitely a good idea. It is best to invest in gold because gold cannot be shaken. It is something that is valuable and will continue to be valuable, never losing its value. It is accepted around the world, in all sorts of countries. The demand for gold is always growing, making it even more valuable. Those who have already invested in gold have been able to make a fortune by selling their gold at a point in time when the price for gold was at its highest. This is, of course, a good time to sell gold because people will be willing to pay more for it. The price for gold typically fluctuates on a supply and demand basis. If the demand is higher than the supply, the price for gold will be a lot higher.
Although Europe is thousands of miles away from the United States, their debt crisis can still have an effect on the lives of other people in different countries, such as the United States, having an effect on the demand for gold and the price for gold. Gold definitely helps the economy and is something people can actually trust to invest in. People who choose not to invest in gold are only missing out on a huge opportunity to increase their own wealth.
The Federal Reserve just announced they would protect the US economy from the debt perils going on Europe. It is possible that if Europe dips into recession the FED could again pump the economy with more printed money. This policy will stimulate the economy but at a cost. When more money is printed that does not have the backing of anything tangible, like the dollar inflation rises. This means this is a great time to buy silver bullion before the spot price of silver heads upward.
Silver is an industrial metal and demand is heavy. However, the supply is low and supply cannot keep up with demand. This will help to keep silver prices up. The fear of Greece defaulting is still in the news and is a problem that does not want to go away. The very fear of a bankrupt Greece along with the possibility of Europe dipping back into recession is more than enough to shake the nerves of stock investors. As a result the stock market remains unstable. Yet silver bullion is trending up once again.
This last year saw silver come close to setting a new price record. Indeed, 2011 was a volatile year for silver and for all precious metals for that matter. Yet, many financial experts think silver will not only go way up in 2012, but is likely to stay there. This is because the Euro Zone is likely to hit many stumbling blocks as it works to fix their debt problems. For example, Portugal just had their credit worthiness downgraded to junk status. Indeed, Portugal could be a new Greece problem in the making.
It is probable that stocks will keep treading water in 2012, and the Euro Zone will continue to be unpredictable. This bodes well for precious metals. While many investors prefer gold as a hedge, it is very expensive. Silver offers the same investment and safe haven qualities that gold does but at a significantly lower cost, and silver often out performs gold. Precious metals are the perfect way to buffer your high risk and often unstable investments.
To recap, The FED just announced they would protect the US economy from Europe’s debt problems. This could mean the FED is prepared to pump more paper money into the economy to keep it going. Yet, this is not without risk, because pumping too much money into the economy raises prices and inflation. The Euro Zone will continue to wrestle with their debt problems in 2012. This means silver is set to soar in price.