Is Silver the New Gold?

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Is Silver the New Gold?

Posted On : Jul-28-2011 | seen (701) times | Article Word Count : 642 |

The price of silver has paced closely alongside Gold since 2007 and continues to attract investors weary of protracted economic uncertainty.

Is silver the new gold? Well, it all depends on who you talk to, who’s investing in silver and why, and how long they intend to hang on to it?

Many of the leading news agencies, experts and investors themselves out there have been publishing stories and offering feedback about how silver is keeping close pace with gold as investors continue to seek out options for dealing with preservation of their assets as the slow-recovery and job growth continue to weigh on the nation’s economy, and that of much of the globalized world.

Investors, anxiously pondering the slow recovery of job growth in the U.S. and competition from foreign economies have been turning to precious metals over the last two years, and for good reason. The prices of gold and silver have been on the rise since 2007 when the the stock market peaked, reflecting what has now become a solid interest on the part of investors who are looking to precious metals, namely gold and silver, as vaults of value to preserve their assets if paper currency depreciates. As for silver, according to iShares Silver Trust, which tracks the price of silver, the price has nearly doubled from its low to its high price the past 52 weeks.

Silver has done even better than gold, which isn't easy to do. The SPDR Gold Shares (GLD) are up 36% from their low to their high over the past 52 weeks. While silver's gains are impressive, it's important to note that gold's bull market started earlier than silver's.

Investors understand that precious metals like gold and silver aren't stock. With stock you get pieces of ownership of companies that produce revenue, earnings and dividends. When you buy precious metals, you're speculating. In other words, you're betting that you'll be able to sell the metal to someone else, in the future, for more than what you paid. And with an increasingly pessimistic view of the economic recovery time frame, many are betting that if they put say 5 percent, in silver in order to diversify risk against inflation, that the economy will worsen and they will be able to sell their sliver and or gold for more than what they invested.

For a little historical perspective, back in 2007, when investors across the globe began panicking following the the real estate crash, the price of gold jumped 30% and silver soared 14% as both metals were viewed as safe havens, says Ken Winans a market historian and money manager at Winans International. "Silver does well when stocks have a bad run," he says. Meanwhile since 1999, when the Standard & Poor's 500 stock index was flat, both gold and silver have beaten stocks by a wide margin, Winans says. If you think stocks are in for another disappointing decade, then history would say, precious metals will be a good place to be, he says.

Here’s something else to consider. According to one report in the San Francisco Chronicle, one of the big advantages of silver that it is not just a store of value like gold. “Besides offering an inflation hedge and helping to calm investors, silver has many applications in industry, medicine and dentistry thanks to its electrical and thermal conductivity, usefulness in making metal alloys and other unique properties. Commercial and industrial applications account for about 60% of silver demand each year.”

If you're going invest in Silver, experts suggest, it’s best to treat the bet like you would a position in a very volatile individual stock. Make sure you know what price at which you'd sell. And if the price falls to that level, don't ask questions and get out.

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<h1>Is Silver the New Gold?</h1> Author: <a href='http://www.articleseen.com/profile_Richard Milano.aspx'>Richard Milano</a> Is silver the new gold? Well, it all depends on who you talk to, who’s investing in silver and why, and how long they intend to hang on to it?

Many of the leading news agencies, experts and investors themselves out there have been publishing stories and offering feedback about how silver is keeping close pace with gold as investors continue to seek out options for dealing with preservation of their assets as the slow-recovery and job growth continue to weigh on the nation’s economy, and that of much of the globalized world.

Investors, anxiously pondering the slow recovery of job growth in the U.S. and competition from foreign economies have been turning to precious metals over the last two years, and for good reason.  The prices of gold and silver have been on the rise since 2007 when the the stock market peaked, reflecting what has now become a solid interest on the part of investors who are looking to precious metals, namely gold and silver, as vaults of value to preserve their assets if paper currency depreciates.  As for silver, according to iShares Silver Trust, which tracks the price of silver, the price has nearly doubled from its low to its high price the past 52 weeks.

Silver has done even better than gold, which isn't easy to do. The SPDR Gold Shares (GLD) are up 36% from their low to their high over the past 52 weeks. While silver's gains are impressive, it's important to note that gold's bull market started earlier than silver's.

Investors understand that precious metals like gold and silver aren't stock. With stock you get pieces of ownership of companies that produce revenue, earnings and dividends. When you buy precious metals, you're speculating.  In other words, you're betting that you'll be able to sell the metal to someone else, in the future, for more than what you paid.  And with an increasingly pessimistic view of the economic recovery time frame, many are betting that if they put say 5 percent, in silver in order to diversify risk against inflation, that the economy will worsen and they will be able to sell their sliver and or gold for more than what they invested.

For a little historical perspective, back in 2007, when investors across the globe began panicking following the the real estate crash, the price of gold jumped 30% and silver soared 14% as both metals were viewed as safe havens, says Ken Winans a market historian and money manager at Winans International.  "Silver does well when stocks have a bad run," he says. Meanwhile since 1999, when the Standard & Poor's 500 stock index was flat, both gold and silver have beaten stocks by a wide margin, Winans says. If you think stocks are in for another disappointing decade, then history would say, precious metals will be a good place to be, he says.

Here’s something else to consider.  According to one report in the San Francisco Chronicle, one of the big advantages of silver that it is not just a store of value like gold. “Besides offering an inflation hedge and helping to calm investors, silver has many applications in industry, medicine and dentistry thanks to its electrical and thermal conductivity, usefulness in making metal alloys and other unique properties. Commercial and industrial applications account for about 60% of silver demand each year.”

If you're going invest in Silver, experts suggest, it’s best to treat the bet like you would a position in a very volatile individual stock. Make sure you know what price at which you'd sell. And if the price falls to that level, don't ask questions and get out. About the Author: To know more about Buy Gold please browse <a rel="nofollow" href="http://www.wholesalegoldgroup.com/">Buy Gold</a> , You can also visit <a rel="nofollow" href="http://www.wholesalegoldgroup.com/">Buy Silver</a>
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