Why does silver bullion offer an exceptional investment opportunity?
*Barron's, by Allen Sykora, October 13, 2008:
"With demand building, the 'poor-man's gold' looks ready to rally.
INDUSTRIAL COMMODITIES GOT GUTTED again last week, yet a bright spot
remains -- in silver futures. While they've hugely sold off since
hitting historic highs around midsummer, demand for coins and bars
remains strong, setting up the metal for a rally through next spring.
Last week's action made silver's price even more attractive. At one
point December silver was up $1.03 an ounce for the week, as global
stock markets melted on credit-crisis fears. But silver then got caught
up in selling across commodities in the final hour of trading, to
settle Friday at $10.60, down by 72.5 cents, or 6.4% on the week.
Silver futures are off 46% from a mid-July high of $19.705 an ounce,
and hit an interim low of $10.31 in September).
The Continuous Commodity Index, an updated version of the CRB which
tracks the overall performance of the commodities markets, set a
14-month low Friday at 392.33, off its July high of 615.04.
Numerous haven-seekers bought gold in the past month, but many more
investors can be expected to seek silver. 'When gold takes off, people
will look for a cheap alternative,' says Gijsbert Groenewegen, managing
partner of Gold Arrow Capital Management. 'That's why silver is called
poor-man's gold.'
Coin and bar sales have been so robust -- the U.S. Mint now is
rationing American Eagle coins -- that dealers say they can't meet
small-investor demand.
'That's going to continue, because the economic problems the world is
facing...are probably going to get worse,' says Jeffrey Christian,
managing director of commodities researcher CPM Group. 'Sooner or
later, physical trumps paper [markets] and the price of silver goes
back up sharply.'
Analysts look for the price of the white metal to rise to between
$14.50 and $24 by the end of next year's first quarter. December gold
has rallied already from a 2008 low last month of $739.80 to a Oct. 10
peak of $936.30. Silver could soon follow that trend."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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