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The Silver Lining

03.24.2016
Ask any investor about what are their contingencies towards handling the current bearish stock market and most would reply without blinking that they are looking at safe havens. Safe havens such as real estate and gold are the primary choices, but as most people know they are expensive and capital intensive, most forget that there are actually other viable alternatives to gold and that alternative is none other than gold’s sidekick silver. From one perspective, silver is without doubt one of safest investments on this planet due to the fact that it is not only regarded as a precious metal, but it is also used in industries quite extensively, the shortfall is, the returns are much lower, but with a significant amount of investment in the current sluggish stock market environment silver represents one of the best opportunities due to the fact that the silver investing climate is ripe and silver will be riding the bull soon enough.

Of lately, silver has been hovering around the $14 to $15 bracket for some time and the ratio with gold is that an ounce of gold could buy about 80 ounces of silver, which is an overly undervalued ratio and if the market is going to stabilise any time soon, what can be expected is silver will revalue itself to a 1:70 ratio with gold provided everything else remains status quo. What is worrying everybody at the moment is the fact that the global financial system is completely out of whack, more than it was in 2008 and investors are frantically looking for the right bandwagon to jump into, but if at all the global financial system does collapse, any precious metal bought at current prices will be able to offer owners to ride the financial tsunami that is inevitable. The fact is many believe that the right price for silver is actually between $ 17 and $ 20 an ounce, and when the financial system finally does fracture, silver will make its way to at least $ 20 an ounce if not more if the financial system fails to rectify itself within a short period of time.

The fact that all other markets with the exception of the precious metal market is seemingly hazy, with the UK which is the 5th largest economy in the world wanting to opt of the EU, new bilateral trade agreements will be in the works and this would have a significant effect on industries everywhere and where the domino effects of these agreements will end is obscure. Currently almost all the major players in the market have taken a step back and are watching the market movement intently hoping to get a glimpse of what might transpire as the next five years is seemingly looking like the past 20 years as governments blow budgets and central banks monetise debts at a rate that is illogical. It is not a question of whether everything is going to tumble down it is a question of when.

World Precious Metal Markets