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Silver Prices Rebound This Week

March 30, 2011 By Leave a Comment

The price of silver looked like it touched on it’s highest level and was ready to recede with early week pull backs that brought the price of an ounce of silver back down to the $35 range. But that all looks like it’s going to change.

Silver hit a high of $38.18 per ounce and that looked like it was all she wrote. No $50 per ounce silver like I had predicted. But the $35 mark looks to provide some resistance even as the stock market and dollar rebound. It appears investors think the price of silver still has some upside potential.

So why does silver have such upside potential? Well, for the first time during this rally (aka the last 2 years) that we’ve seen, there appears to be evidence of a shortage in silver. If you believe this article then you may think that silver is not fulfilling the demand and that the price of silver, inevitably has to go up.

Although futures is really only one indicator as to the actually inventory of silver, the fact that there are so many contracts out there and that we’ve recently observed in the news that the iShares ETF SLV is adding to it’s silver stores, that could mean good things for those of you long silver.

Filed Under: Silver Investing, Silver Prices

Shorting Silver With the ProShares UltraShort Silver ETF

March 25, 2011 By 1 Comment

We’ve read a lot of people lately saying that the price of silver is too high for their liking. The historic ratios to gold are too off. There isn’t enough demand. What are people thinking?

The list goes on, but yet, the price of silver continues to rise.

So what if you’re one of those people who think that the price of silver is going to tank. You think that the central banks around the world are going to stem inflation, the unrest we see today is going to be settled, and the all mighty dollar is going to rise.

Are you one of those people?

Well, if you are, then you will most likely want to look at the ProShares UltraShort Silver ETF. For those not familiar with UltraShort funds of this nature they look to get double the inverse of whatever the underlying investment would be. In this case silver. They look to get 200% return as the price of silver bullion goes down.

The symbol for this ETF is NYSE:ZSL. It’s trade on the New York Stock Exchange and offered by ProShares. The ETF doesn’t invest in bullion but rather financial instruments whose underlying value is based on the price of silver.

We’ll be investigating this further for you but thought we would kick start the series on different ETFs this way.

Filed Under: Silver ETF Tagged With: ,

The Price of Silver Reaches $37 Per Ounce

March 23, 2011 By Leave a Comment

The price of silver per troy ounce reached $37 and kept going today. As I write this article an ounce of silver is $37.28. The price of gold, in lock step with silver or vise versa tipped above $1437 an ounce.

This upward trend does not look like it is going to stop either. Earlier in March when there was a drop in the price of silver there was a lot of speculation that the long standing historic ratio of silver to gold was finally going to come back in play. Gold was standing strong and silver was pulling back.

However, with this most recent barrier being broken and more and more people getting bullish on silver bullion, ETFs and mining companies as investments, it looks like the lock step trend upwards is going to continue.

How high will it go?

Well you can read around and see that the price is all over the map. The more conservative views say $30 is too high and should be the ceiling while others claim breaking the $100 mark within the next 2 years.

Given the fact that investors are seeking a safer place to put their money and inflation around the world doesn’t look like it will come under control, we’re calling for a middle of the road $50 mark. Just enough to break the all-time high of silver which was just over $48. A word of caution with that. The $48 mark was hit amid a price fixing scandal in the early 80s. So one could speculate that the true all-time high of silver was much lower.

In fact, it wouldn’t be far fetched to say we’re seeing an all-time high in silver when you don’t account for inflation.

No matter how you slice it, we’re seeing a continued bull market in precious metals and it doesn’t look like it’s going to stop anytime soon.

Filed Under: Silver Prices

The Price of Silver Jumping to New Highs

March 22, 2011 By Leave a Comment

The price of silver per ounce has jumped over the $36 mark and is currently sitting at $36.38.  This while the dollar looks mildly stronger and the price of oil shoots up even higher.

Gold on the same day was reaching new highs but has since stepped back from these highs, although continues with a modest gain on the day of $2 per ounce to sit at $1429.  Both precious metals are making charges even though some skeptics are beginning to shout from the rooftop that silver is way over priced given the historic ratio to gold.

Basically what that means is that the price of silver usually follows a close trend to the price of gold, and although silver has had a much higher run-up in the past year, it now has slightly overshot the ratio.  However, the use of gold and silver has and continues to be different with silver tending more towards the industrials while gold towards the consumer market.

Although these discrepancies exist, many still hold true to the historic ratio as the best indicator for pricing on these precious metals.  I’m more of the opinion that though these ratios are a decent indicator in the long run, there are more recent changes in how precious metals are traded and invested in that may throw these ratios out of whack.

Namely, the ease at which you or I could buy silver.  Right now, I can go to ebay, northwest mint, or APMEX Gold and Silver. Also, SLV, GLD, IAU and other ETFs in the precious metals sector are making it extremely easy for investors to move the metals.

All these factors are combining to put radical changes on the pricing models that were once used and may shift these ratios.

Filed Under: Silver Prices

Investing in Precious Commodities: Gold, Silver, and Copper

March 21, 2011 By Leave a Comment

With the U.S. debt reaching an all-time high and the consistent devaluing of the dollar, many citizens are turning to investments in precious metals to stabilize their financial security in a shaky market.

Though the economy is in the midst of an economic upswing, there are many areas of the world, such as Greece, Spain, and Ireland, that are still facing hard economic times. Nasdaq’s website reported that precious metals stocks are on the rise, and over the last few months many people have been buying shares into these precious commodities to add desired stability to their investment portfolio.

As an investment, precious metals can be a solid choice, as investors have watched these commodities reach record multi-decade highs. Everyone wants to make gains in their portfolio, and metals seem to be a credible option. The Economic Times reported that gold has seen a 400 percent rise and silver a 480 percent rise in value over the last 10 years. This rise began, in part, due to its liquid value as an asset. Even though the most recent economic global crisis helped foster this increased demand, precious metals don’t devalue over time.

The market has seen many peaks for precious metals over the years, and back in the 1970’s gold went up almost 800 percent. Precious metals haven’t yet reached that point, but now seem to be rising toward it. A rise in the value of precious metals seems to follow a decline in the dollar, and as the U.S. government is faced with economic difficulties, gold, silver, and copper continue to surprise investors with their consistent gains.

The versatility of the precious metal’s market value is another factor that has made it so popular. It’s great for long or short-term investment purposes. Although, it’s not recommended by financial counselors that you put all of your capitol into precious metals, it’s definitely a good addition to any diverse portfolio, along with your mutual fund, IRA, or 401k investments. TimothySykes.com reported that silver penny stocks have some potentially high return rates for a low initial investment.

Protect your portfolio by investing in precious metals and other commodities to ensure that you’re prepared for any market downswing or adverse fluctuations in the stock market. Just go online, and seek the advice of an investment professional to help you get started.

 

Filed Under: Precious Metals, Silver Investing

Investing in Silver Mining Companies

March 20, 2011 By 2 Comments

Often I’ll get asked through comments or direct emails about ways to invest in silver and sometimes even specifically about ways to invest in silver mining companies. More recently the ladder and I thought I would put together a list of some mining companies that I’ve followed in the past or have recently followed given developments in the world.

First up is the Silver Wheaton Corp (SLW:NYSE). This is probably one of the more widely known silver investing and sales mining groups which owns, operates or purchases from mines through the world and sells silver directly through these productions. Peru and Mexico to name a few. Their price at this writing was $39.90 a share, which was off from their 52 week high of just under $47.

Next up is Silvercorp Metals Inc (SVM:NYSE) which produces silver amongst other metals and in 2010 had produce 4.6 million ounces of silver. Currently they are trading at 12.84 which is shy of their 52 week high of $15.35. I personally like this company because they are diversified not only in locations with China and Canada among their mining regions but also that they produce Zinc and Lead as well.

Another one which we are a little more keen on than others is the Pan American Silver Corp (PAAS:NASDAQ). Now a quick run through the mining and producing companies will show high multiples (P/E) and a lot of worry for a standard value investor. But this isn’t standard investing in a commodity production company. Instead we look to the fact that within the industry the P/E for PAA is low and they offer a dividend, as low as it may be at 0.03 per quarter, but a dividend none-the-less. They have start to finish silver production and work in Mexico and South America with a solid upside if the price of silver continues to rise.

Finally, Silver Standard Resource (SSRI:NASDAQ). We’re a fan of this company because while PAAS has some better than average in the industry P/E ratios, SSRI blows it out of the water. Solid 6.42 multiple which should make a lot of investors happy. Also, the company is diversified with Canada, the Americas, and Australia operations. Silver production is looking good with this mining company.

Although we’re not qualified by any means to give you solid investing advice. We look at the above mining companies as good to watch and we’d consider them for our portfolio. Any more you wanna add?

Filed Under: Silver Mining

Silver and Gold Start the Week Up

March 20, 2011 By Leave a Comment

It was an uneasy weekend for a lot of investors who have been watching all that is going on in the world, middle-east, japan, currency and bank issues all over. Most markets are still waiting to open and it’ll be another day before the NYSE opens but silver has started out with a jump in price, along with gold.

After an up and down week this new start looks promising especially given what the US is getting themselves into. The price of silver is up nearly 40 cents and the price of gold is up nearly $6 as it looks like buying pressure is back on. Silver is sitting at $35.63 per ounce at the time of this writing while gold is at $1422.60 per ounce.

A pressure that was most likely waiting to see what the price of oil would do and see if people would still be into buying precious metals. Food prices are heading higher, oil is heading higher, all signs are pointing to inflation unless some of the central banks start raising rates. Even then, the damage may be done. Which is why people are buying silver.

This spot market start can be a good indicator that SLV:NYSE, the silver ETF trust, will be headed up in monday morning trading when the markets open. And you can follow that to GLD:NYSE and the like as well.

We’d suggest cautious optimism although we are pretty optimistic. Having owned and still owning silver bullion bars, that’s also a way to get in on the action. We’re thinking of upping our stake in some way or the other. I’d like to put some SLV in a retirement account or look towards APMEX Gold and Silver, which is where we purchased previously, to buy some more.

A good start to the week can mean a lot of things, but we’re thinking positive.

Filed Under: Silver Prices

Fears of Inflation Could Drive the Price of Silver and Gold

March 18, 2011 By Leave a Comment

It seems no matter what magazine you financial newspaper you read these days you’ll find someone wondering about the economy and more specifically about inflation. Theres talk that central banks are going to have to start raising interest rates or watch the problem get out of hand.

In fact, I’ve read two recent articles about the bond market and a lot of people worrying that we will see the need for a sudden rise in interest rates and the subsequent collapse of the bond market a la 1994. If that happens, what will happen to the price of silver?

While one never can truly predict the pricing of precious metals we can give a pretty good estimate of what will happen, it will go up. Currency fears of the dollar, the yen, and the euro will have a lot of people looking to put their money into something more tangible, like precious metals. Although at the same time they’ll be able to get a little better rate on normal savings and CDs, they’ll most likely be looking to put money into a more substantial place… Silver.

This will drive the price of silver up quite a bit higher than expected as it will have yet another force on it to make it go. We see the price of silver heading to $50, as we’ve said before and think that it may even move higher if the economy and rest of world disasters continue to drive the world economy.

We’ll have to wait and see if this inflation is going to stick around or if the price of that gallon of milk with come back down. Time will tell.

Filed Under: Inflation, Silver Prices

The Price of Silver is Dipping

March 15, 2011 By 2 Comments

Well, the price of silver along with all other investments is taking a backseat to having cash in hand as the the world-wide markets take a tumble. We’d like to think that precious metals serve as a safe haven, but the sell-off is causing ETFs and silver futures to look a little down.

Doug Eberhardt posted this great article on seeking alpha discussing his long-term bullish outlook on silver but a near term worry that leads him to believe the price of both gold and silver could be headed down. Or at least flat. He breaks it down by major world currencies to see what might possibly be causing a near term pull-back with long term increase.

Basically he doesn’t like any currencies but worries strongly about the big three, the Dollar, the Yen, and the Euro. To many obligations for each and not enough to back them, is the basic gist. This could mean for a big push on the price of silver as the dollar, etc really won’t buy much of the same anymore.

We’ll have to wait and see, but with silver dipping below $35 once again, you have to hope he’s right on the upside.

Filed Under: Silver Prices

Price of Silver on Retreats, But Don’t Worry

March 9, 2011 By Leave a Comment

The price of silver moved from $35 per ounce to $36 per ounce quicker than most people were thinking and didn’t look like it was going to stop. However, as with any fast moving investment, people are going to take profits along the way.

Silver and gold are no different than any of those other fast moving investments. But that shouldn’t worry those looking to still profit from the rise in precious metals, there still looks to be quite a bit of room to run.

The Street did a nice little recap on both gold and silver looking to a few of the common analysts in the game these days. One said gold was going to stick around $1400 – $1500 per ounce for a little while as investors try to make heads or tails out of the continued rally. The other two said silver was going to range from 34 to 42 with settling point around $37 per ounce.

You may have read one of our most recent articles where I mentioned that silver was definitely going to hit $50 per ounce in 2011, well I’m sticking with that, and I’m stick with the idea that it will hit $50 well before the end of the year. We’re only in March and already the big investment news sources are running articles on precious metals that all have the same thing in common. They all mention the fact that silver is charging ever closer to it’s all-time high.

For those that don’t remember my reasoning behind a $50 price point, here goes.

Now that you can trade silver and gold ETFs, SLV and GLD respectively, and both precious metals are easy and safe to buy like at places such as APMEX Gold and Silver, both have become the same bubble prone invest that any stock has become with people looking to any multiple or number to give them hope that they haven’t missed the chance to “purchase the growth” already. Tough thing about it is, most don’t know the true underlying value of gold or silver and are just buying on emotion.

Interest rates higher? Buy Gold. Dollar value going down? Buy Silver. Inflation with that dollar value? Buy both. Silver hasn’t reach it’s all-time high yet? Get in while you still can.

No where do you see talk of supply or demand by the mining and refining companies. Heck, most people don’t even know where to look for that. Well I guess we’re no better here, but we don’t claim to be investment gurus. Enjoy the ride!

Filed Under: Silver Prices
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