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.
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.
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.