Silver's performance has been substantially stronger than that of gold in the recent price run-up, and it is still seen as undervalued in comparison.

David Levenstein
Saturday, October 9, 2010
www.mineweb.com

JOHANNESBURG
In the same time that the price of gold has moved from its recent lows of $1155 to a new record high, above $1360 an ounce, a rise of 18%, although it has come back slightly since, the price of silver has moved from $17.50 to over $23; an increase of 31%.!
In a previous article on silver, I stated that "we will see the price of silver make a decisive break above $18.50/oz and a rapid move to $21/oz. Thereafter, it should challenge the $25/oz level. It is also my firm belief that silver is going to be one of best performing assets during the next five years."
During the last six weeks the performance of silver has been exceptionally stellar and to be frank, it has surpassed my expectations. By that I mean the price has got to a level in a shorter time frame than I expected. But, the price level does not surprise me, nor does the percentage move. On many occasions I have written about the percentage moves in silver and how they are generally much greater than those in gold.
Like gold silver is affected by the global currency crisis and as the dollar continues to weaken, silver prices will continue to increase. As the price of silver trades at a 30 year high and as the price has increased by 31% in less than six weeks, everyone is asking if there is going to be a correction. Well, of course there will be corrections, but I am not sure if we will see it occur at these levels or if we will see it once the price of silver hits $25. But, as long-term investor who cares? I am not in the business of trying to time every move in the market and believe that it is impossible to do that. However, the longer term bullish trend is very much intact and the price has a long way to go before it peaks. As the price of gold gets more expensive some investors may prefer silver to gold because it is less expensive and because it is still very much undervalued.
"Wealth preservation are the key words... We expect silver to keep trading in parallel or stronger than gold, but with higher volatility as recovering industrial demand and even stronger investor demand gives the metal an extra boost," stated Filip Petersson of SEB Commodity Research in an article in The Wall Street Journal.
On Tuesday, holdings in global silver exchange-traded products rose by 103 metric tons to set a record of 13,867, reports Barclays Capital. In India, the world's largest importer of gold, there is a growing sentiment that silver is replacing the yellow metal. For the first half of 2010, silver imports in India have risen 579 percent, for a total of $1.69 billion. Many analysts see the momentum in India rising through the festival/holiday buying season.
Last week the United States Mint raised their wholesale pricing above spot on American Silver Eagles to all authorized dealers from $1.50 to $2.00, an increase of a whopping 33%. This year will go down as a record year for Silver Eagle sales, as the United States Mint has already sold more than 25 million coins to-date.
The forecast for silver is overwhelmingly positive, and I still urge investors to buy some of the physical metal. Buy bullion bars and bullion coins no matter the premiums. In a few years time the prices that you pay now are going to look very cheap in comparison to prices you are going to have to pay in the future.
TECHNICAL ANALYSIS
The recent move in silver has been very strong as evidenced by the number of bullish candlesticks. A market with such momentum seldom collapses overnight. It is possible for the price of silver to move higher before we see a correction and some consolidation.
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Silver And China 03/22/2010
 
Silver may perhaps become the next commodity as China runs up the price, just as it has done with oil, copper and uranium. Silver is positioned to become a commodity that commands price percentage increases that are the same as and possibly more than gold. Skeptical?. Peruse any fiscal periodical or go online to assess recent price changes in silver.

An examination of historical price fluctuations will show that precious metals including silver have shown strong increase in importance, and profit, on top of the last six months.

So how does that affect the average consumer? Knowledge about how silver can replace fiat currency gives you time to buy silver. American Silver Eagles or rounds, it will not matter when inflation makes it almost impossible to economically spend your paper dollars.

What are the top ways to invest in this commodity? That depends on your state of affairs. Are you an person with incomplete funds? If so, you may want to begin buying American Silver Eagles or silver rounds. For clarification American Silver Eagles are minted and distributed by the American government. Silver rounds are produced by private mints. Both sets of coins still possess silver content.

Each of these can be purchased singularly or in larger quantities. Your economic schedules and resources should influence your spending patterns. Large investors can justify purchasing either silver bullion or bags of silver coins. The silver content of bagged coins, dimes, quarters, and half dollars exceeds the frequent commercial rate of the coins.

Something to beware of and pay attention to is the government of China. The Chinese government is encouraging its people to buy silver. With a affluent country as aggressive as China, this can only contract the availability of silver coins and bullion inside the open marketplace. The effect on the silver market will be a giant demand in the value of available silver. Chinese citizens, poor, middle class, and rich can buy silver coins or bullion. This bullion can be in the form of 500 grams, 1, 2, and 5 kilo bars.

The stockpiling of silver is steadily increasing in certain areas of our nation. Fringe organizations, investors, and collectors all compete for supplementary silver. For investors the silver content is what matters. For collectors the rarity and condition of silver coins is vital. The rationale for acquiring silver is unlimited. But the rising apprehension centers around cost and availability regardless of the form. Furthermore, the cost of anticipated stock market failures and the increasing devalued dollar add to an urgency to obtain silver.

As a fiscal strategy contrary to the failure of the dollar, silver ownership is wise. Easier to buy than gold, silver is obtainable for the typical investor. And silver is a first-rate barter tool. As China works to relieve itself of the American dollar the price of silver should grow. If our central banking system fails, paper money not backed by silver may become effectively worthless. We may perhaps face the likelihood of restless inflation.

An oversupply in the availability of money through out the preceding year has facilitated conditions for the importance of silver to grow over the next few years. Furthermore, the volume of silver being mined has not increased. It has remained constant at best from historical levels.

As earlier mentioned silver coins are outstanding as a barter currency. The inherent worth is in the content of the metal. In contrast paper currency is assigned a value by the mandates of the government. That is the reason why all significant nations cannot avoid experiencing monetary failure. Paper money is exactly what it is, paper.

Now that you have learned more regarding silver than you ever wanted to know I need to ask you three questions:
A) Can you invest between $40 and $50 monthly to systematically acquire silver?
B) Do you make a habit to examine financial publications ?
C) Did you know that this instant is the time to make plans for your profitable future?

Recommendation: Stay alert to economic conditions.  Silver is experiencing a greater boost in importance than gold. Control your economic future.

Thanks for reading my article. Please examine my other articles on silver investing. You will be glad you did.

Please feel free to bookmark this article to share with someone else. Live long and prosper.

 

Ronald Roberts is a former Army Officer and MPA graduate. His many interests include public administration and academia. His favorite quote: Never despise a humble beginning. His blog is http://www.americaneaglesilverdollar.info.

For a more direct approach to protect and increase your wealth visit http://www.besilverrich.com.

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Silver Historical Background

Silver has attracted man's lure for many thousands of years and because it has been found in limited amount over the ages and while it scarce it is the most overflowing and least expensive of the precious metals. As such it has become linked with value which led to its use as part of the world's fiscal system right through the ages.

In the United States, silver started to play a key role in the fiscal system when Congress based the currency on the silver dollar, and its fixed relationship to gold. Silver was quickly used for coinage in the U.S. until its use was discontinued in 1965.

After the end of the 19th century the admittance of the 20th century altered the use of silver from being exactingly part of a fiscal value to its becoming vital in different parts of the economy. Silver quickly became an industrial raw material with it being sought as a vital and practical industrial commodity, as well as an appealing investment precious metal. Countries including the Unites States, Canada and Mexico issue silver bullion coins and they are also available from confidential mints.

While silver is scarce, it is the most overflowing and least expensive of the precious metals [http://silvermarketbasics.blogspot.com] with the largest silver producing countries being Mexico, Peru, the United States, Australia and Chile. Sources of silver include; silver mined directly, silver mined as a by-product of gold, copper, lead and zinc mining, and silver extracted from recycled materials, primarily used photographic materials. Today, silver bullion stocks make up a significant component of silver supply.

The American Eagle Bullion curriculum was launched in 1986 with the sale of gold and silver bullion coins. Platinum was added to the American Eagle Bullion family in 1997. A bullion coin is a coin that is valued by its weight in a point precious metal.

Silver more than other precious metals, has significant demand rooted in sectors as diverse as imaging, electronics, jewelry, coinage, superconductivity and water refining. For this reason, silver is no longer known as just a precious metal, a store of value, a work of art or an industrial metal. It is all of these. Today silver is indispensable, effective all around us to boost the quality of our lives.

Author: Ruben Trevino
Article Source: EzineArticles.com
Provided by: Guest blogger

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People have gained much knowledge about making secured investments in precious metals and this has paved way for the bullion investments on gold, silver and platinum. Most common form of these bullions is coins, bars, rounds etc.

Silver bullion coins are known for their economic cost and easy handling. These coins are preferred by people all over the world for offering best gifts to their beloved ones and also as a hobby to collect rare and precious silver bullion coins.

The silver bullion coins are of 99.9% pure with many sizes starting from one ounce and also of various designs engraved on them. Several countries around the world have issued silver bullion coins with their traditional designs and national designs on them.

Some of the famous silver bullion coins are American Eagles, Canadian Maples, Chinese Pandas, Australian Kangaroos, Britannia, Canadian Maple Leafs etc. As these silver bullion coins are most gorgeous and are very rare and antique they are valued much.

It is very easy for us to buy these silver bullion coins through online or through local dealers if possible. Online purchases are quite comfortable and speed as there are plenty of silver bullion dealers who offer their best service to the buyers.

If the buyers are cautious and knowledgeable about the fine online silver bullion coin traders then they can immediately place order for the rare and beautiful silver bullion coins to own their asset.

Most of the authorized silver bullion coins are very pure and have substantial premium that convenient to trade.

Silver bullion coins like Sliver Eagles are very familiar and can be sold swiftly as they guarantee for the purity, weight and content. These coins are privately minted or legally minted and the cost of the coins is based on its make and type of minting.

Due to the variations in the stock market the price of silver bullion coins changes daily and for the current updated values we can go through the related websites.

If we place order for these coins the cost of the coins include its premium for minting and shipping charges. For silver bullion coins the delivery cost is nearly $19.00 for up to 20 ounces.

There are some trading techniques as we talk about silver bullion coins. It is always advisable to re-sell the coin in time of emergency to the new dealers than to the person whom we have bought them.
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