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Silver by Eric Sprott
karabaya
(zabusavam)
28. decembar 2012. u 12.01
Why are (Smart) Investors Buying 50 Times More Physical Silver than Gold?
Eric Sprott| December 24, 2012 - 8:38pm .

As long-time students of precious metals investing, there are certain things we understand. One is that, historically, the availability ratio of silver to gold has had a direct influence on the price of the metals. The current availability ratio of physical silver to gold for investment purposes is approximately 3:1. So, why is it that investors are allocating their dollars to silver at a much higher ratio? What is it that these „smart” investors understand? Let’s have a look at the numbers and see if it’s time for investors to do as a wise man once said and „follow the money.”

Average annual gold mine production is approximately 80 million ounces, which together with an estimated average 50 million ounces of annual recycled gold, totals around 130 million ounces available per year. In comparison, annual mined silver production has averaged around 750 million ounces, while recycled silver is estimated at 250 million ounces per year, which adds up to approximately 1 billion ounces. Using this data, there is roughly 8 times more silver available to buy than there is gold. However, not all gold and silver is available for investment purposes, due to their use in industrial applications. It is estimated that for investment purposes (jewelry, bars and coins), the annual availability of gold is roughly 120 million ounces, and of silver it is 350 million ounces. Therefore, the ratio of physical silver availability to gold availability is 350/120, or ~3:1.1

As you can see, investors are choosing to buy silver at a ratio to gold that is well above what is available. This uptrend doesn’t show any signs of slowing either. The ratio of the physical silver to gold is both rising and extraordinarily above the availability ratio of 3:1.

We can also use other data such as the most recent issues of the Sprott Physical Gold and Silver Trusts. The last Gold Trust issue in September 2012 raised US$393 million and the last Silver Trust issue raised US$310 million. On the basis of prices for each metal at the time of issue, we could purchase ~213 thousand ounces of gold and ~9.1 million ounces of silver. This represents a purchase ratio of 43:1.

If we examine ETF holdings in both gold and silver, we note that in the period from 2007 to 2012, the increase in silver holdings amounted to 12,000 tonnes, compared to 1,200 tonnes of gold – meaning, investors purchased ten times more silver than gold.

These are only three factual data points to consider, but there are other indications that silver investment demand is way out of line with availability. Our favourite question to the bullion dealers we meet, is to ask the ratio of their dollar sales in gold versus silver. The answer is that dollar sales are equal, which means that physical silver sales relative to gold are greater than 50:1.

A recent news headline on Mineweb read, „Silver Sales to Outshine Gold in India.2” It went on to quote a bullion dealer that „investors and jewelry lovers prefer silver jewelry these days.” As the largest importer of gold in the world, it would be impossible for India to purchase an equivalent amount of silver, as it would require more than one billion ounces, essentially more than the current annual mine production.

While these last two confirmations of silver demand are anecdotal, the statistics from the US Mint, the ETFs, and our Physical Trust issues, are factual.

For the time being, the silver price is essentially set in the paper market where the daily average trade on the Comex is approximately 300 million ounces. An outrageous number when you compare it to the daily mine production of about 2 million ounces. As Bart Chilton, Commissioner of the Commodity Futures Trading Commission stated on October 26, 2010, „I believe there have been repeated attempts to influence prices in silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in the silver market and any such violation of the law in this regard should be prosecuted.”3

Which brings us back to the phrase „Follow the money.” In our view, it is almost inconceivable that investors would allocate as many dollars to silver as they would to gold, but that is what the data shows.

The silver investment market is very small. While the dollar value of gold in the world approaches $9 trillion, the value of silver in the forms of jewelry, coins, bars and silverware is estimated at around $150 billion (5 billion ounces at $30 per ounce). This is a ratio of 60:1 in dollar terms.4

How long can investors continue to buy silver at the current ratios when the availability for investment is only 3:1? We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1, when both were currencies. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded to „Follow the money.”

On behalf of all of us at Sprott, I wish you safe and happy Holidays and a prosperous New Year.

P.S. – US Mint Sold Out of Silver Eagle Bullion Coins Until January 7, 2013
The Mint recently informed authorized purchasers that all remaining inventories of 2012-dated Silver Eagle bullion coins had sold out and no additional coins would be struck. Since the 2013-dated coins will not be available to order until January 7, 2013, this leaves a three week void for the Mint’s most popular bullion offering.

http://sprottasset.com/

1 Sources: Gold data is from World Gold Council www.gold.org, and silver data is from Silver Institute, http://www.silverinstitute.org/site/supply-demand/
2 Source: Mineweb.com
3 Source: Bloomberg: http://mobile.bloomberg.com/news/2010-10-26/silver-market-faced-fraudulent-efforts-to-control-price-chilton...
4 Sources: Gold data is from World Gold Council, silver data is from United States Geological Survey (USGS) and Silver Institute.
karabaya
(zabusavam)
28. decembar 2012. u 12.05
20 razloga zašto ulagati u silver.

1.The amount of silver consumed annually and bought for investment exceeds currently exceeds total annual mining output and has for years. That gap has been filled by sellers willing to sell from existing inventories and as prices rise. As time passes this will naturally push prices significantly higher until this fundamental imbalance reaches a true equilibrium price where supply is closer to demand.

2.Both industrial and investment demand for silver is growing in excess of the annual increase in mining production growth. The available inventory is low and will get even tighter over time. These two factors will lead to a continued tighter supply-demand situation going forward. .

3.The lower price of silver at $32 appeals more broadly to small investors relative to the more expensive gold at $1705, especially if gold prices continue to rise.

4.Most silver is not found in mining sites in any significant concentrated form. It is usually chemically bound to other metals; much of it is actually the byproduct of mining for lead, copper, etc. In the last few decades this made it less attractive from a profitability standpoint to invest in pure silver mine. Now prices have finally recovered enough to make new projects feasible again. So there is new investment in the sector but it is a lengthy multi-year process to bring on significant new production. .

5.The last time silver was found in huge concentrations or veins that dramatically affected the amount available and therefore significantly lowered prices was in the Comstock Lode in Nevada in the late 1800's. The Comstock Lode produced tons of ore that was very pure with concentrations of 25-50% silver. Silver mines today have much lower concentrations, usually always less than two ounces per ton of refined ore.

6.Silver is the most conductive metal on earth. Gold is also conductive but is prohibitively expensive due to its much higher price for most industrial uses compared to silver.

7.Silver is an industrial metal with over 10,000 commercial applications. Because it is one of the best electrical and thermal conductors, that makes it ideal for electrical uses such as switches, multi-layer ceramic capacitors, conductive adhesives, and contacts. It is used in some brazing and soldering as well. Silver is also used in solar cells, heated automobile wind shields, DVD's and some mirrors.

8.Silver is an essential element in the electronic gadgets that are a growing part of our digital age. It is in every cell phone, smart phone, tablet, computer keyboard, solar cells and every radio frequency if ID device (RFID). This makes it an essential element going forward as the world becomes more addicted to gadgets. The growth and rising living standards of people in the emerging economies will drive long-term growth of new customers that will demand more and more electronic gadgets.

9.Silver's industrial demand should increase 60% to 666 million ounces per year by 2016 from 487 million ounces in 2010. Current annual mine production is only around 700 million ounces per year growing a few percent annually.

10.Of a total of fifty billion ounces of silver that have been mined in history, only two ounces (estimate) or 5% remain in above ground inventories available to be bought and sold. This is due to silver being used up in industrial applications in very small quantities, which makes it unprofitable to recycle at today's prices. A lot of silver is used in minute quantities in industrial products which are used up and discarded without being recycled.

11.This is unlike gold where five billion ounces have been mined and two and half billion ounces (estimate) are still available in all inventory. Since gold is hardly ever discarded because of its very high price, used mainly in jewelry or for investment purposes, the total inventory is so much larger than silver.

12.The supply demand equilibrium in silver is extremely tight. There is now less than one year of inventory of silver, compared to over eleven years of inventory in the 1970’s.

13.Exchange Traded Funds (mainly SLV, SGOL, PSLV, and CEF) have opened precious metals investing in silver to millions of investors around the globe. When investor make net new purchases, the ETF purchases physical silver and removes it from the available market, which increases the scarcity of available supply. This is the first time many investors worldwide are not required to actually buy physical silver bullion and coins and store it themselves. Now they have an investment vehicle that offers liquidity and ease of trading to get exposure to precious metals. 14.Silver also has many medicinal applications. Roman soldiers long ago noticed that if water is kept in silver cups, it wouldn’t become stagnant. Today silver in „colloidal” form is used as a broad spectrum antibiotic. It can be used in bandages to treat burn victim's wounds and also in colloidal form actually swallowed to target microorganisms in one's gut. It is also used in water purification systems.

15.The US Dollar has lost 31% of its purchasing power just since 2000. The dollar has lost a staggering 82% of its value since the US was taken off the gold standard in 1971. Since the Federal Reserve was created in 1913, the US dollar has lost 95.6% of its purchasing power. When you compare the historical appreciation and more importantly, the retention of real purchasing power of precious metals versus the dollar in those same time frames, those facts alone should convince you that significant exposure in precious metals is necessary to protect your wealth. The primary and overarching reason you should have a significant percentage of your investment assets in precious metals is simple: to protect the real purchasing power of your accumulated wealth! In this age of government's abusing their privilege of excessively printing currency, on a magnitude and scale not seen for decades, only gold and silver can protect and actually grow your wealth.

16.Gold and silver are such unique elements with so many uncommon properties. Therefore the chance of a gold or silver substitute being developed is almost impossible. It hasn't happened in thousands of years and it probably never will. That is what makes them exclusive; they can't be printed, manufactured or copied. They can only be mined, purchased from a willing seller of the world's existing inventory and from recycling.

17.Unlike an account at a bank, a dollar bill or a bond, these are all both an asset and liability to counterparty. This includes every other financial instrument and derivative man has created in history. Precious metals are the only asset class with no counterparty risk if you have physical or very secure possession. They will always retain some value and can’t go to zero like any other investment.

18.The total amount of silver available to trade in the physical silver market is only about $70 billion versus the total gold market which now exceeds $4.3 trillion. As you can see from these numbers, the total market size of the silver market is only 1.6% of the size of the entire gold market. This lack of liquidity and use of extreme leverage in its respective futures market produces wild volatility in price fluctuations of silver.

19.The total gold market is sixty one times the size of the silver market yet. As interest in silver increases this sets up a situation where prices could soar higher.

20.Since World War II, the US government has sold over five billion ounces of silver and currently has no reported stores. Now that vast stockpiles are gone, the supply demand equation has changed dramatically.
Profesor-Kanada
(Profesor)
01. januar 2013. u 11.47

Brokers Must Seeks Owners of Unclaimed Funds, Wash Post Says

Brokers will be required to search for customers they have lost track of to send them dividends, interest payments and other distributions under a new rule adopted this month by the Securities and Exchange Commission, the Washington Post reported.

The rule will apply when checks exceeding $25 remain uncashed. When that occurs, the obligation to search for and notify the securities holder applies, the SEC said, according to the newspaper. The notice would have to be mailed no later than seven months after the check was sent, the paper reported.
Taurus
04. januar 2013. u 10.09
Evo jedan interesantan pregled koliko još imamo zaliha raznih materijala.
Srebra, ako se bude trosilo pod danasnjim stopama, imamo još samo za 29 godina !

http://aheadoftheherd.com/Newsletter/2012/The-Great-Sharing_files/HowLongWillitLast.jpg
znalac2
(shkafishkafnjak)
14. januar 2013. u 06.10
od metala sad zasad samo platina. PPLT mi za trenutak izmakao s radara i već od 147 otisao na 159. indicije su da će još ići gore. znaci zasad nicht zlato i srebro nego samo platina.jedan dodatni razlog za platinu: auto industrija.

1. veliki zaostatak za zlatom. platina mora da prestigne zlato

2. porast zlata znacio bi i dodatni porast platine sto je bonus

3. auto industrija. bolje je uloziti u platinu nego direktno u auto industriju npr gm, ford posto je sigurnije

bazirano na ova 3 faktora platina ne može da ide dole ni u zutom.

ovo sve napisah da bih sebe podsjetio da ujutro kupim platinu
norijega
20. januar 2013. u 19.30

„And it's not just the central banks of industrial and emerging economies that are interested in gold, according to Fritsch. The German people alone privately own an estimated 7,500 tons of gold – double the amount of the German Central Bank.”

http://www.dw.de/germany-begins-hauling-gold-reserves-back-home/a-16526925
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