Silver Values

Silver vs Gold - Which Will Do Better?

Well, again, I do not have my crystal ball.

 But I did see some interesting speculation on Seeking Alpha. They bring up the old point that silver is gold’s poor relation, and because it is considered to draw more value as an industrial metal (rather than money), that silver was not expected to do as well during a recession like the one we have as I write this. Silver also tends to be very volatile, and everybody from saints to tin foil hat wearers believe that the silver price is much more manipulated than the gold price.

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OK, this auction looks very fishy to me. Now you have all heard of the GOLD ETF where you buy shares of “paper gold”. But here is a guy on EBay who is setting up his own paper gold company. Paper Gold On EBay.

The auction says that you are bidding on a certificate of ownership for each ounce of old you purchase. They will store the actual gold until the time you sell it back to them. Right now, the auction is selling this ‘ownership’ at $940, but Kitco says an ounce of gold should be a hair over $800. And the seller says they will buy the shares back for $40 less than spot. So right away, your $940 ‘gold ownership’ investment will be worth a bit more than $760.

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Well, it is hard to find a safe place to invest in the stock market right now. Of course, the silver and gold bulls are hanging in their with smug grins on their faces. See, gold is a commodity. And no, they are not the best performing commodity over the last several months. However, precious metals are also sticking in the middle of the pack.

The thing about precious metals as a commodity is that they are easy to take delivery of. You cannot take delivery of  corn, wheat or oil, but you can take delivery of gold and silver! This means you are not speculating on something you cannot hold. This is one appeal of gold and silver investments.

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This is an interesting exercise to perform if you are concerned about the value of your gold or silver stash. Compare the price of an ounce of silver or gold in July of 2007 to the price it is today in June of 2008. Then do the same with a few of last year’s hot paper investments!

OK, so I’m a day behind. Silver-Prices.net just updated their silver stock portfolio. That post was yesterday on April 8, 2008. Even though they are, in general, bullish on silver, their opinion is that we could have a pullback on the bullion price, even down to $15 and ounce.

Now I can find lots of opinions out in cyberspace to the contrary, who believe that the time to buy is now. Personally, I cannot see how our weak dollar and increasingly challenged economy suggest anything but gradual increases in the silver price. Especially when people are having trouble finding bullion at coin dealers in many parts of the country!

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