Precious Metal Investment

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Precious Metal Investment - one oz. Proof U.S. gold bullion

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A precious metal investment could well be the best move you ever make for your portfolio.  In fact, if things get as bad as they very well could, precious metals could be the thing that saves your finances from complete ruin.  While there are a number of precious metals, not to mention other resources in general, to invest in, silver stands apart as a particularly rich proposition.  There are a number of factors that could conflate to create an epic opportunity for the poor man’s gold, as it’s sometimes called.  At the same time, the lure of that opportunity, understood by enough people, could create a demand that outpaces supply and alone helps push prices into the stratosphere.  In fact, we already see a big push into gold funds and silver funds.

Precious Metal Investment Opportunities Given Silver’s Industrial Demand

In addition to being a precious metal, silver is unique in having widespread industrial application.  Copper, a widely used base metal, is not a precious metal.  And gold, perhaps the most oft thought of precious metal, has only minor manufacturing utility compared to silver.  This inherent value in silver makes it a prime precious metal investment.

While the industrial application of silver could cause silver to suffer in an economic downturn, the reality is that the industrial uses are themselves growing.  Silver has a role to play in electronics, medicine, water treatment, health and beauty aids, textiles, and so on.  So even a slowing is juxtaposed against internal growth.  Moreover, silver is in a state of very low above-ground reserves, so the likelihood of flooding the market with silver is slim.  After all, we already consume more each year than is mined when investment purposes are considered.

Precious Metal Investment In Light Of Individual Investor Demand

Since silver is such an ideal precious metal investment, the demand placed on the bullion market is enormous.  Countries such as India, which previously viewed precious metal as a form of jewelry, are changing their thinking to view metal as an investment and hedge against inflation.  In China, the government is actually encouraging citizens to purchase precious metals.  China is a net importer of silver bullion.  It’s intake actually quadrupled in 2010.

The investment demand nevertheless has massive room to grow.  While the U.S. Mint has been selling records amounts of Silver Eagles, that fact alone can paint a skewed picture.  The reality is that most Americans do not even own any gold bullion.  The statistics are even more abysmal for silver.  The mainstream media has been weak to tout precious metals.  It is far from being dinner table talk in the typical household.

Precious Metal Investment And Silver’s Supply Problems

While the demand is closing in on silver supplies from all angles, there is simply less silver now than before.  As alluded to, the annual demand is estimated to be in the neighborhood of 900 million ounces of silver.  However, all the combined mining activity around the globe only produces about 700 million or so ounces.  There is scrap silver and recycled investment silver that helps make the shortfall.  But, as noted, the above ground reserves are at critically low levels.  With even reasonably stable demand, a shortage of silver alone can influence price upward as people bid up the scarce supply.  This adds a unique advantage to this precious metal investment.

There’s really no reason to expect demand to wane.  Emerging economies around the world are trying to increase the quality of life of literally billions of people.  Doing so places a great need on the consumer products that use silver.  There’s no reason to expect silver’s investment demand to go down at this point.  Quite the contrary, more and more people are becoming alerted to the wisdom of owning silver.  And, the chronic threat of fiat currency devaluation has people turning to silver and other hard assets to retain wealth.  Inflation also prompts alert individuals to look for ways to leverage what they have.

Precious Metal Investment Predictions Based On Silver’s Potential

 

From here, silver still has room to go, and I believe is the ultimate precious metal investment.  People need only look at the nominal highs silver posted throughout the 1970s.  That alone shows that we are nowhere near the high hit in January 1980 of around $50.  In inflation adjusted terms, silver would have to blow past that nominal level to equate.  Looked at from another vantage point, you can see that the bull market of the ‘70s was really one drawn-out event from the lows to the highs.  Seen that way, silver went up over 3,500% before it was over.  From silver’s lows of under $5 in this present bull market, silver would have to be over $150 an ounce to even relate.  By the time you factor in this epic, world-wide decreasing interest in fiat currencies and push for precious metal investment, the stage is set for silver to do even better.

Precious Metal Investment