Gold and Silver: Price Does Matter

By Brad Zigler

Real-time Monetary Inflation (last 12 months): 4.7%

The moderator of supply and demand is supposed to be price, right? Well, the report on third-quarter demand from the World Gold Council ought to be a real head scratcher, then. Supplies of gold are down 5% from year-ago levels, says the council, while demand has fallen 34%.

Year-over-year demand has dropped in each of gold's three market segments: for investments, off 46%; for jewelry, down 30%; and for industrial use, off 11%.

Gold prices, however, have risen universally. In key markets such as India and Turkey, gold prices spiked 15% and 33%, respectively. In dollar terms, gold rose 12% year-over-year, while euro prices rose 11%.

The bull market may have put gold out of reach for many consumers. That may account for some of the renewed interest in "the poor man's gold"—silver.

Since Monday, silver's made its first significant breakout move relative to gold since August. The 60x level for the gold/silver ratio looks likely to be challenged. A sustained decline in the multiple would signal the end of a 16-month cycle.

The active December COMEX silver contract settled at $18.42 Wednesday, taking out the resistance spotted in our Monday Desktop column ("Where's Silver Going?").

December silver is now working the upper half of a trading band that was churned for five months following its March 2008 breakdown from a $22 high.

That puts the contract on track to test resistance at $19.18, if selling at $18.86 is overcome. Support can be anticipated at the $18.45 level.

*INVEST IN SILVER NOW and have superior returns!

INVEST IN SILVER

INVESTING IN SILVER is definitely a good idea nowadays. There are many reasons why you should start buying silver now. Here is a list that I have concocted to enable you to think twice about where to put your hard earned money. (Circumstances may vary so please consult your own adviser)

INVEST IN SILVER REASON NO. 1: GOLD IS HOARDED WHILE SILVER IS CONSUMED. Gold is not lost, it just take a lot of forms from dentures to jewelry. I consider it a 'morph' metal since it endures and takes different shapes. Silver on the other hand is another story. With the vast applications associated with silver from your LCD, to your mobile phone (it's an excellent conductor) to medical treatments, it will be a wonder to see the levels of supply shrink in the long term.

INVEST IN SILVER REASON NO. 2: SILVER IS STILL DIRT CHEAP. The psyche of the population is still towards gold and not on silver--YET. When the masses realize (and they will soon) that silver is the metal to keep they will all come charging in, depleting supplies and pumping prices sky high.

INVEST IN SILVER REASON NO. 3: GOLD IS EXPENSIVE. You can only keep so much gold because of the current prices and that can be a bummer especially for middle income employees who have limited resources.

These are simple yet observable reasons why we should not stop finding ways to INVEST IN SILVER.

SILVER INVESTMENT TIPS

SILVER INVESTMENT TIPS can be useful especially for the new time investor. Right now silver has breached the 15$ per ounce price and is headed out the window. If you have not started buying, you might want to squeeze a little more cash to get things done. Here are a few SILVER INVESTMENT TIPS that can become really helpful:

SILVER INVESTMENT TIP NO. 1: NO ETFs or PAPER SILVER- paper silver issued by investment companies especially in the US can be manipulated and is worth nothing (sorry for the blunt description). The mess in the US was caused by much greed and dishonesty, especially in fiscal reporting.

SILVER INVESTMENT TIP NO. 2: GO FOR ACTUAL SILVER- whether your holdings are in bullions (which tend to be more expensive), popcorn, bars or whatever you have, as long as the purity is .999 then that is alright. My opinion is if you have small denominations of pure silver in your possession then that can be easier to spend than silver bars. (get the jist?)

SILVER INVESTMENT TIP NO. 3: STERLING IS NOT PURE SILVER- if you were thinking about heading to the SM Mall and buying all the Sterling silver you can get your hands on, then strap your boots for a moment and listen. That is why you need to heed these SILVER INVESTMENT TIPS so that you would understand that sterling is below .999 in purity, it could be .92 or .90, which is certainly very less in value and does not appreciate as much.

SILVER INVESTMENT TIP NO. 4: NUMISMATICS- this refers to collectible items and other coins that are very expensive due to the fact that they were minted for a certain premium. It takes a lot of training to eye the real coins from the fake ones and you might end up with chocolate in the inside.

SILVER INVESTMENT TIP NO. 5: READ CREDIBLE SILVER AUTHORS- there are a lot of gurus out there which are trying to tell you to buy their stuff. Check out their credibility and if they are really who they say they are. One authority that i trust is David Morgan, author of the Silver Investor website.

If you know what you are doing, this kind of investment should protect you in the long run. Whenever there is a great investment like Silver, then surely SILVER INVESTMENT TIPS can aid the aspiring metals investor.