Is Saudi Arabia also stocking up on silver as well as gold?
Posted on 22 June 2010 with 5 comments from readers
News that Saudi Arabia has secretly doubled its official gold reserves over the past few years should come as no surprise to readers of ArabianMoney. But then it was just speculation. Now this is fact. Will it be the same story for silver?
We can only draw on the evidence and gossip that comes to our attention in Dubai. There has certainly been a big jump in interest in silver on the arabianmoney.net website over the past six months.
Indian weddings
Then we hear that there is new demand for silver from India for weddings. Basically gold has gotten too expensive so Indians are coating silver in gold and satisfying themselves that at least silver is also a precious metal.
This is what you would expect as the gold price rises. Silver is literally poor man’s gold at one sixty-fifth of the price. Does that mean the Saudis will stick to gold?
Not necessarily, the desert kingdom has some shrewd investors well versed in the merits of real assets in a global financial crisis. And there are those in Saudi Arabia who reckon the global economy is far from being out of the woods and want a contrarian investment as a hedge.
No fools
They have also read the gold and silver literature. They know the argument that the silver price will not only advance with gold but outperform gold as the price takes off because silver stocks are tight, short positions in futures markets enormous and investment demand rising as an alternative to paper currencies.
So given this week’s sudden revelation about Saudi gold reserves, we can pretty be close to certain that they will also have been active in the silver market.
When if ever will this come to light? That is far less easy to predict.
5 Comments posted by readers:
i totally disagree with you,, Saudi (people and not investors) especially Bedwins love gold and only gold,, if you go to any gold store, they will accept to buy and sell gold,, but that can not be said about silver.. they dont have any,, and they dont buy it,,
but now with gold price hitting new records people are turning to silver jewelry. ,, like in India,, but that is not an investment, at a 1000% price over spot!!
Imagine the platinum and palladium they own. You don’t want to get caught without them, if you want to do any petroleum cracking with catalyst that work. If you have the bars, it’s not hard to find some company to produce the catalyst for you. Not hard at all.
Well said, Peter!
Many Sovereign Funds are secretly stocking up on precious metals . . . the physical kind, not the “paper” gold and silver ETFs.
Given the unsustainable budget deficits in the East as well as Western countries, the continuing financial global chaos, the on-going gold/silver price suppression by JPM et al, and the continuing fraud/ corruption with the so-called “investment banks”, any investment in physical silver & gold is a sound one.
Or as some experts are now saying,“it’s the only safe investment.”
Buying gold and silver, in what way shape or form is a better investment than bank stocks will every be. One it’s fair, 2 it’s of real value….
That being said, the poor mans gold got his name some how, and as one can see, even the faithful gold buyers don’t mind buying silver when there is no other metal to buy with a pay check. Gold and silver, even salt, do very well in times of monetary fires, always been so, and will presumably always be so, that is as long as we are able to recollect history.
Saudi are not stupid, so why would they not figure out paper money is nothing more than a bad habit.
NewsFlash: Read this commentary about the US FED contemplating a new QE round . . . to the tune of $5 trillion.
http://www.zerohedge.com/article/evans-pritchard-announces-fed-contemplating-5-trillion-qe-expansion
If this gathers steam and is executed in January 2011, the US dollar will no longer resemble “money” shortly thereafter . . . look for precious metals, oil, & other hard assets to skyrocket.
If you don’t own any gold & silver now, in the spring of 2011, you will look back on this date and wish you bought all you could afford . . .