Why do so few investors seem to understand the silver story?

Peter Cooper | July 9, 2012 via silverseek

It is a mystery story really: why do so few investors seem to understand the case for silver? After all the track record is formidable. Silver prices have risen 10-fold in a decade, out performing gold and pretty much any other investment available to the ordinary investor.

You would need to have been a private equity investor like Mitt Romney to have done better or some kind of hedge fund rocket scientist trading derivatives in a favourable market. Silver is a boring lump of metal and anybody could have owned it. Those who did, and held their nerve during the volatility, are laughing.

Tempus fugit

The diehards who miss every major investment call through excessive caution would now have it that silver’s game is somehow up. Industrial use will plummet in another global recession producing a panic crash in the silver price.

Well yes we saw that in 2009, except that silver prices rebounded faster than almost anything else and went to record a record high of almost $50 in April 2011. They then corrected by half and have been trading in a narrow range ever since, the classic market correction before another price advance.

So if we have already seen the silver price have a major correction recently why should it do so again if the rest-of-the-world decides to do the same? Or if it does then why should it be anything so dramatic? In short, this time the volatility factor favors investment in silver rather than argues against it.

Some serious investors probably will catch on to this point very soon and indeed the technical data from the futures market suggests those bets are already being placed. The stage for another very powerful upswing in silver is being set.

$50-60 target

Readers of Arabianmoney will recall the predictions in the Old Dubai Gold Souk of $50-60 silver by September (click here). We doubt this will be far wrong and it may be that these prices are reached in advance of a global financial crash of some variety in October that pulls silver down again.

Will silver then correct back to current prices or are these prices a floor in the market that will not be seen again. We wonder. With so much money printing by global central banks, currency instability and the banking system under severe pressure, silver is bound to shine sooner or later.

The latecomers to this investment party will then ask themselves why they did not understand the silver story earlier.

Advertisements
Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: