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SILVER FOR DIVERSIFICATION AND SAVINGS
SILVER’S IMPORTANCE
Silver is a beautiful, white lustrous metal and is known as Ag on the Periodic Table which comes from the Latin word argentum which is derived from the Greek word for shiny and white.
Silver is considered a precious metal, and it is also an industrial metal of major importance. Silver has the highest electrical and thermal conductivity of all the metals. Silver is also the most reflective of any metal.
Silver is found in earth’s crust as an alloy with gold and other minerals and metals and has been considered a precious metal and treasured throughout history in most of earths’ cultures as a precious metal.
Silver is one of the seven ‘Metals of Antiquity’, which humans found and used in prehistoric times. The other six metals of antiquity are: gold, copper, tin, lead, iron, and mercury. It is considered that these are the seven metals from which today’s world was built.
The Metals of Antiquity were also associated with the seven days of the week and with one of the seven known celestial bodies: Sun/Gold/ Sunday; Moon/Silver/Monday; Iron/Mars/Tuesday; Mercury/Mercury/Wednesday; Jupiter/Tin/Thursday; Venus/Copper/Friday; Saturn/Lead/Saturday.
GOLD SILVER RATIO
Basically, the gold-to-silver ratio is the amount of silver it takes to purchase one ounce of gold. Many investors use the gold-to-silver ratio as one of many indicators to determine the most beneficial time to buy and sell precious metals as well as an signal to diversify their portfolios.
Prior to 1900, the gold-to-silver ratio hovered around 16 meaning 16 oz of silver would buy 1 oz of gold. This ratio has fluctuated roughly between 14 and 100 since 1687.
What is interesting is that the U.S. Geological Survey has estimated that there is approximately 17.5 times more silver in the Earth’s crust than gold. A number close to the historic gold-to-silver ratio of 16.
It easy to calculate the gold-to-silver ratio; you simply take the price of gold, and divide it by the price of silver. For example using recent market prices: 1295.70 (gold price) divided by 16.94 (silver price) = approximately 77 (Gold-to-Silver ratio).
At these recent market prices, for the gold-to-silver ratio to return to it’s 16 to 1 ratio, the price of silver would have to be approximately 81 (1295.7 divided by 16). However the recent silver market price is only 16.94. And this is one of the many excellent reasons so many astute investors believe diversification with physical silver is such an excellent opportunity today.
DEMAND FOR SOLAR POWER = DEMAND FOR SILVER
Silver is a primary ingredient in photovoltaic cells. The average solar panel uses about two-thirds of an ounce of silver. And as demand for solar energy increases, so does the demand for silver. China’s consumption of silver for solar could easily double. This increasing demand for silver in the solar marketplace alone could easily push the price of silver up in the years to come.
SILVER SUPPLY
According to Sprott Asset Management: “There are only approximately 1 billion ounces of silver left above ground in bullion form today; a small number in relation to the 46 billion ounces mined throughout history.” The primary reason for this is that silver is an industrial metal before it is a precious metal, and the enormous requirement for silver in industry related applications is staggering. Silver is used in various applications from surgical instruments, medical applications, to electronics and even clothing. Typically the amount of silver used in each separate application is so small that it is not recycled for economic reasons….it is simply too expensive to recover in small amounts from garbage dumps.
JP MORGAN ACCUMULATES MASSIVE AMOUNTS OF PHYSICAL SILVER
Since 2012, JP Morgan has increased their holdings of physical silver from less than 5 million ounces of physical silver to over 55 million ounces of physical silver.
Why?…Many people wonder. The answer may simply be when wise investors see storm clouds of increasing bad risk, financial turmoil, and unsustainable bubbles forming in the paper markets – stocks, bonds, equities, they historically seek the shelter of safe haven tangible investments like physical gold and silver. In fact, in 2015 in a letter to shareholders Jamie Dimon, chairman and CEO of JPMorgan Chase stated, “There will be another crisis”. So it appears that JPMorgan Chase is practicing the wise old adage: Be Prepared.
SILVER PRICE TRIGGERS
Movement in silver prices and gold prices are often triggered. Crisis impact the financial markets. The trigger for the crisis is not always the same, but the triggers do come. Triggers can be geopolitical; they can be linked to rapidly increasing interest rates, out of control government debt, and war. Triggers have also come from collapsing and unsustainable bubbles in the stock and real estate markets.
SHFE OVERTAKES COMEX AS WORLD’S LARGEST FUTURES SILVER EXCHANGE
And here comes China! The SHFE (Shanghai Futures Exchange) has overtaken the Comex and become the world’s largest futures silver exchange, which led to a huge decrease in silver exchange inventories because while most COMEX silver and gold contracts are settled in cash, the Shanghai exchanges settles the majority if its contracts in physical metal. It is estimated that Chinese investors purchased 22 million ounces of silver in 2013 compared to zero in 1999. This enormous amount of Chinese silver investment put them in second place behind India.
Many investors consider that buying physical silver now at the current low market prices represents an excellent opportunity for low risk diversification in a safe haven investment.
Whether you are looking to have precious metals shipped directly to your door safe and fully insured, or if you are considering opening a physical precious metal IRA or rollover, we can help. Call us today for your complimentary precious metal consultation. We look forward to serving you.
www.thegoldiracompany 855-554-4853