Buy Silver Bullion Coins

By Matt Badiali, editor, S&A Resource Report 
Saturday, December 3, 2011

Silver is an amazing metal… which is why it's likely to soar over the coming years…

You see, silver has more than 10,000 uses. It's one of the world's best
conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever… It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.

I'm not saying industry is going to use up all the world's silver. That
simply can't happen. But scarcity is a real issue.

Our rapid consumption of silver leaves very little to meet any uptick in
demand from investors. A spike in interest will send prices spiraling
higher…

Here's a breakdown of the silver market. The table below shows the
percentage of the total amount of silver consumed by each category over the past four years… 

Silver Supply Consumed By Sector 
 
Industry              2007           2008           2009         2010 

Photography        53%            54%            45%          49%
Jewelry                13%            11%             9%            7%
Silverware            6%               6%              7%            5%
Coins/Medals       4%               7%              9%           10%
Surplus/Investing 10%            11%            21%          12%
Total                   100%           100%         100%         100%

As you can see from the table above, only 12% of the silver supplied to
the market made it to bullion in 2010. That means only a little more than 100  million ounces of silver became bullion for the entire investing
world.
 
That's a tiny fraction to sop up all the investment interest  in the world.

Of that silver, about 43 million ounces went to exchange-traded funds like  the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).   That means you could buy all the extra silver bullion for about $2 billion.  We could buy all the surplus silver bullion from the last four years for about $10 billion.

That's the same as the market value of the iShares Silver Trust today. If you  wanted to build another silver fund, you couldn't. There just isn't enough silver bullion out there to fill the order.

Even trying to amass that much physical silver would send the silver price soaring. It's a simple market fact… When there is more demand than supply, it drives the price up.

And the economic problems confronting Europe and the United States have increased interest in precious metals… Silver gained a colossal 174% from August 2010 to April 2011.

In May 2011, however, the price collapsed 31% in just four weeks. The bull market simply ran up too far, too fast… and the decline wiped out many highly leveraged silver traders.

As I showed you on Wednesday, this has temporarily dampened sentiment toward silver. The "big money" – commodity trading advisors, pool operators, and hedge funds – isn't interested in silver at all…

The current bottom in sentiment is a great signal for us to add silver
positions. The big money will eventually return to silver… The economic forces (namely Western debt) driving people away from paper money and toward precious metals aren't going away any time soon.

As those big traders come back into the market, they have the capital to tie up all the excess silver production in the world. Remember… you could buy all the extra silver production over the last four years for less than $10 billion. Those traders could invest far more money than that.

When they do, the silver market will tighten up, and the price will roar
upward. That's what we see EVERY TIME sentiment bottoms. When those big traders stop being bearish, they put enough money into silver to move its price. Sometimes it's 28%… Sometimes it's 405%… But it always goes up. (You can find the full story on that here.)

If gold and silver prices are nearly certain to rise over the next few years
(and probably rise dramatically), the simplest way to play that trend is to buy bullion… real, hold-in-your-hand silver coins.

And I recommend everyone do just that… Buy some silver and store it away.

Good investing,

Matt Badiali

P.S. If you've already built your bullion position… there's another way to
ride this trend to much larger gains than bullion is likely to offer. I just
completed a full report on the opportunity. I wouldn't be surprised to see every dollar you invest in this opportunity turn into $10 or more. Get the details here.
 
 
Further Reading:

 With investor sentiment momentarily negative toward silver (and just
beginning to turn back up), it's a great time to take a position in this
long-term bull market. Read more here: How the "Big Money" Could Push Silver 54% Higher in 2012.

"I don't expect to make 800% returns," Brett Eversole writes. "But we could easily double our money through shares of this silver company over the next few years… even if the price of silver goes nowhere."

Gold and silver have both made something of a recovery after their sharp falls last week - the question is whether this can be sustained in the short term or whether we are due another fall.

Lawrence Williams
May 9, 2011
www.mineweb.com

NEW YORK
In a sign that much of the market feels that perhaps the sharp fall-off in the gold price - and also that of silver in particular - may have been overdone, the prices picked up a little on Friday to well above their low points, and carried on moving upwards Monday morning in Asian and European trade. Gold moved back above the psychological $1500 level, while silver rose by a bigger percentage- as might be expected following its huge fall in percentage terms - to back over $37.

As we have pointed out before here, virtually all the politico-economic factors which have moved the gold price higher and higher remain just as strongly in place - if not more so given the seeming escalation of the financial crisis in Greece, while one has a strong feeling that defaults in U.S. cities and States are not far away now, which could give another boost to the upwards spiral.

Despite the Eurozone problems, the U.S. dollar still looks weak against other major currencies as other Central Banks are seen as more likely to raise interest rates than the U.S. and some of the recovery so far today has been due to the dollar resuming a downwards path after a very minor recovery last week. Mexico's gold purchases in February and March (we don't know yet if the country continued purchases in April) should help underpin the price revival - while Asian buying seems to be continuing apace.

As to where the gold and silver prices go from here in the short term this is largely dependent on the U.S. market today to either confirm the rally or put an end to it. Ultimately though gold does look poised to continue rising, even though it can show weakness in the summer months - a view taken even by many among the more objective analytical community.
Silver is a bit more of a conundrum and will definitely remain much more volatile. There are hugely conflicting views on silver supply. The tendency has been for silver to rise faster than gold when the latter is on the up, and crash much faster and farther when gold falters. One has to doubt whether the gold:silver ratio will quickly get back to the low 30s given the number of speculators who have had their fingers burnt in the past week's dramatic fall. It is currently at 40 at the time of writing.