Tuesday, October 23, 2012

Why I continue to accumulate silver for investment: 23 Oct 2012

-Through out history, the gold to silver ratio has averaged 15 to 1. Currently, the ratio is about 53.6 to 1 and most analyst believe that the ratio will revert to the mean of 15 to 1 most likely towards the end of this bull market.
-Silver is still below it's inflation adjusted 1980 high which is about $130 per ounce. Furthermore, it needs to rise by 56% from it's current level of $32 per ounce (23rd Oct 2012), to get up to $50 per ounce (1980 nominal high of silver). This offers great upside potential.
-Unlike gold, silver is also an industrial metal and gets consumed.
-Silver is a store of value against currency devaluation.
-Silver and gold are 10 years into what has been projected to be a 20-year bull market by legendary investor, Jim Rogers.
BUT the biggest reason of all is:
-From the monthly data that comes out from the U.S. mint, "...For every dollar that goes into gold, there is a dollar that goes into silver. With the price ratio between gold and silver being over 50 to 1, that means 50 times more silver is being sold by the U.S. Mint than gold." [Eric Sprott] he continues...
"But the availability of silver to buy in the world in relationship to the availability of gold to buy is in a ratio of 1:100, but they are buying on an 1:1 basis, which would suggest that silver will be way more explosive than gold, unless of course that changes dramatically."

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