A very encouraging article, Ed.! Just what I needed! My problem at the moment is when to invest further in silver since, as you say, there is going to be another fall in silver price when the stock markets really do crash.

Still, buying electronically allows me to wait for just that right moment of time.

Reading this article reminds me of the movie ” Chicken Run” where, at the end, the two rodents are scheming to produce and sell eggs; they are not certain whether to initiate their business with the purchase of an egg or purchase of a chicken; the argument deteriorates into which come first. Both valid of course.

I agree with your assessment of silver. I advise my clients to hold 100% gold only if they need to draw down most of their holding within 12 months. If they have a longer term investment plan and depending on their circumstances I suggest they mix in silver up to 80% due to silver’s potential for greater returns over the longer term.

Also interesting to note that most of my customers that have setup their own Self Managed Super Funds (similar to US 401k) invest at least half of their precious metal holdings in silver with a considerable number allocating 100% to silver on the reasoning that they can’t access their funds until retirement, which for many of my clients is 20+ years, so they can ride out any volatility for the expected higher returns. I have one client who invested most of their SMSF funds in silver in 2005 and their 5 year average return on their retirement fund has been 45% pa.

Lastly a post on the future of primary silver mines:

http://ausbullion.blogspot.com/2011/11/glimpse-of-future-of-precious-metal.html

08/09 silver retraced 50%, similar move this time around takes us to 23.75ish. This aligns nicely to the lower long term trend line for silver.

In the absence of similar collapse in equities, seems likely slv stay in this trading channel 28 to 35, going nowhere slowly!

If you see a different technical setup be keen to hear.

Oh and this market has completely dislocated from fundamentals, trade the news etc.

Curios to learn if gold souk has restocked 1kg bars at spot?

Hi,

I much enjoy your pieces. They are the neatest of all that I read every day on the Net. However, I think it’s silly to suggest that silver may ever be more valuable than gold. This is simply because there is a great deal more of it. Because of its industrial qualities its price may slightly exceed the traditional ratio with gold even here there are doubts. The recent discovery of graphene by Andre Geim and Konstantin Novoselov (Nobel prize 2010) shows that this material has even more electrical conductivity than silver at ordinary temperatures. As graphene is an allotrope of carbon (obtainable in virtually umlimited quantities) then silver is likely never to exceed its status value as a consumer good.

@ Keith Hudson:
You make a valid point about graphene and its special properties, when compared to silver.

However, graphene is rare. While there are many places in the world with large graphite deposits, finding high quality graphite that is suitable for extraction, then subsequent processing into graphene is not a simple process; further, it is an expensive process.

Further, high grade graphite with excellent crystallography is rare, and is derived from graphite that is 99.99% pure, a form of graphite called “highly ordered pyrolytic graphite” (HOPG). I did some research on HOPG and discovered that it’s a special form of graphite with an angular spread between the graphite sheets of less than 1 degree.

Based on the above, I’m confident that in the near future, graphene will find many industrial uses; but it’s likely that the cost per ounce will be greater than the cost of 1 oz of .999 silver.

Keith, I have heard more experts say that there is more gold above ground than silver than the other way round. I googled on silver versus gold supplies and most of the websites say that there is much more gold above ground than silver.

http://www.google.co.uk/search?sourceid=navclient&aq=3&oq=above+ground+silver&ie=UTF-8&rlz=1T4ACPW_enGB356GB357&q=above+ground+silver+vs+gold

I understand that silver is more difficult to mine and that there are more industrial uses for it including the recent one of impregnating bandages for antibacterial or healing properties.

I own much more physical silver than gold, whose above ground supplies are, I understand, fairly constant with jewellery and computer usage being matched by mining production.

Be careful people. The Italian 10 year bond yield is going up almost daily. That has the potential to cause a major crash within a few months. Italy is too big to bail. I’m not saying it will cause massive problems without warning, but it certainly has the potential to do so. Italy has a massive amount of debt to roll over within the next couple of years. A euro collapse might send silver way up, or way down. A lot of smart people like Bill Gross are predicting BIG problems in Italy.

in the next big either uprun or downrun move, physical gold or silver may not even be available, and if it is, the premium will soar.

increasingly in a downturn, paper PM’s may be sold off, but the line is around the block for physical….ITS ON SALE.

the lines in the last little ripple were just a hint.

Think about your own experiences in buying both gold and silver. You thought of both as precious metals and wealth preservers. Did you buy silver because you wanted to take up more room in your storage, or because it was less expensive? When millions of metal newbies start panicking and loading up on precious metals (which may be, depending on events, in the next few years, or it may be tonight) they will do the same — some gold, but the sticker shock will send most toward the less expensive silver. Until I see one-ounce and one-gram graphene coins, I will put the bets on silver.

I believe you’re right Chris. Had I a lick of sense back when I was 30 and an early baby boomer (1944) I’d have bought all the property that I could get, because there were millions of baby boomers following right behind me a few years. Same with Silver, for the reason you mentioned. It might be far greater than any of us can imagine. I mean, what else is there?

hello guys

I just read your opınıons about all metals what ı do belıeve ın sılver wıll be hıt 130 per ounce sooner now maybe ıt shows ıt goes downtrend no one cant stop gold and sılver to go hıgher and hıgher so that means ww3 ıts already on the way sınce 2001