There is really no other way to assess your investment in silver than to compare it with your gold investment. In that sense, silver currently appears to be better value than gold. This week has started with silver showing remarkable stability, a better performance than gold and promising signs of recovery.
The way the gold and silver markets are behaving gives us strong reasons to seriously reconsider such terms as “safe haven”,” intrinsic value”, “fundamentals” and “leverage” as short term trading, speculative outbursts, and market mood seem to prevail over financial logic, analyst forecasts and technical analysis.
By adopting the “new volatility”, faithful investors as well as newcomers to the precious metals commodity market have nothing to fear and quite a lot to gain by diversifying their portfolios.
Silver is now safer than gold
Demand for silver and gold is at its highest level ever, and it is obvious that this year silver bullion coin sales will once more set an all-time record. The fact that this is the second year that supply does not meet demand makes it almost impossible for silver prices to stay at these levels: if investment demand doesn’t drive prices higher, industrial demand and thirst for silver jewellery (coming mainly from India and China) most certainly will.
Gold got a boost at the end of last week on the back of conflict in Iraq, but it is doubted that these gains are sustainable. What’s worse, gold is moving without support and closer to dangerous levels, while silver seems to be safer around the $19.5 per ounce point, with strong support levers all the way down to $19 per ounce and a GSR improving at 65.
As silver is safer from central bank manipulation, the only danger could be that it would drift together with gold in a possible negative course. However, so far this year silver and gold don’t seem to be moving hand-in-hand, and in fact gold has been much more volatile than silver in contrast to what we were seeing in the past.
Nothing has changed as far as gold and silver fundamentals are concerned, but contradiction of rumours (bad news, good news) and analyses on whether gold is “cheap” or “expensive” can create a feeling of disbelief, and lack of trust towards the way the market is functioning.
Silver more appealing than gold
Both gold and silver are assets whose value has been established through thousands of years, and this will not change in two weeks. What is fair and at the same time crucial, is to let the market apply its own mechanisms of supply and demand, and thus remain reliable.
In that perspective, silver now appears to be a more appealing investment than gold, due to its greater stability and better potential when an upward trend forms. Breaking the strong $ 20 an ounce resistance, silver will then be free to pursue much higher prices.
Investor sentiment currently seems to be with silver, especially bullion coins, so take your pick from coinivestdirect.com’s brilliant collection of silver bullion products, always selling with minimum premiums and excellent buy back prices.