Silver Lining
Posted in: In The Black
Posted by: Gavin DuVenage on November 21, 2009 12:37 PM
Is silver the next platinum? As Amran points out in his comment to the
earlier gold post, low global supplies, and more industrial usage, mean
silver may eventually do even better than bullion.
For years,
platinum enjoyed a second-class although respectable status as "white
gold". Throughought the 60s and well into the 70s, platinum languished
well below $200 an ounce, according to <i>Gold Miners
Research</b>. Much of what was then produced was used for
jewellery.
But by 1980 motor manufacturers had discovered a cool use for the
metal: it helped convert toxic emissions to less harmful gases. Now,
almost any car that rolls off a production line uses a platinum
converter. By last year, it had reached an average price of $1, 573 an
ounce.
Silver, which is trading today at around $18.26, could go the same way.
It is now an important component of silver-zinc batteries, a principal
component for electronic devices and, increasingly, electric cars.
Analysts say inventories are being depleted and manufacturers are having to pay more to ensure supplies.
So hang on to that ugly teapot Granny left you in her will: it could be worth its weight in gold, some day.
It would make sense to me to diversify a bit by holding gold, platinum and silver bullion. I do not like the ETF's...not safe in my opinion. Have you seen their official documentation? Full of loopholes!
Thx.
Anthony
www.bullionhold.com/news
The problem with precious metal ETFs is that unlike possessing physical gold or silver, you never really know what is happening with your assets. You don't own any of the fund's assets, the fund owns them. As Anthony points out, if you read the fine print you will likely find some dodgy clauses - mainly the phrase ‘similar to an investment in gold or silver‘. What does similar mean? Where exactly are they putting your money? Are they leveraging your cash in risky instruments? You just don‘t know.
The main reason to buy precious metals is to have a hard asset in times of crisis. The ETFs are good if you are an active short term trader, but for peace of mind against Armageddon nothing beats the shine of a real, solid bar.