Don’t Panic, Buy Silver
SOURCE:[The Gold Report] – Rick Mills It looks bad for precious metals. Gold prices have fallen hard. Explorers are hurting for money. Slim treasuries mean fewer drill programs. Scarce discovery news could lead to fewer listings on the Toronto Stock Exchange. But all is not lost. In this interview with The Gold Report, Rick Mills, owner and host of Ahead of the Herd, points to the fundamentals of silver and the opportunities for stock pickers willing to invest in small bites and wait out the inevitable market ups and downs.
The Gold Report: Precious metal bullion and equities are taking a hit right now in the market. Why do you feel silver is an interesting investment today?
Rick Mills: There is a disconnect this year between silver and gold. They usually trade in lockstep, and their market prices are doing that.
As of April 2, more than 140 tons of gold has flowed out of various exchange traded funds (ETFs) this year, while silver ETFs have added more than 20 million ounces (20 Moz). Maybe that is because silver is more affordable than gold or because silver also has industrial uses.
TGR: But the ETFs do not reflect a price disparity between gold and silver.
RM: It is hard to figure out. In Q1/13, U.S. mint silver coin sales reached an all-time high of 13.2 Moz. Annualized, that is 52.8 Moz silver sold in 2013, another record. The $10 billion spent to buy those ounces would be a record as well. Investors are buying 56 times more silver ounces than gold ounces.
TGR: Why is that?
RM: Silver is called poor man’s gold. Both are monetary metals, silver for even longer than gold. And silver just might outperform gold in the future. The S&P/TSX Venture Composite Index is trading similarly to the early 2000s when silver was below $10/ounce.
TGR: The appetite for silver bullion is voracious.
RM: The monetary climate is dominated by quantitative easing. There has probably never been a bigger need for non-fiat money, yet the most popular safe havens are the U.S. dollar and Treasury bonds. German bunds are popular. It is hard to understand government controlled paper assets being more popular than real hard money.
Post from: Gold News from Gold Editor
2013-04-16 12:48:40
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