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Silver and Gold Bullion Investment

by johnjackson

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Gold and silver bullion investment is the choice of investment for investors as paper money deteriorates in value.  In 1990 the price of gold was $400 an ounce. In 2011 it went up to $1875 per ounce. Similarly, silver bullion prices went up from $7 in 2005 to $40 per ounce in 2011. So in percentage terms, silver yields more wealth than gold.

Industrial demand plays a vital role in the prices for both silver bullionand gold bullion. Silver bullion is used in equipment’s like cell phones, solar panels, water purification, washing machines and other items. Gold is mainly used in jewellery and has less industrial demand like silver.

Silver bullion is the choice for many investors because central banks do not own silver but they own gold and hence silver is more explosive. When markets for silver/gold go down, silver bullion usually goes more down than gold bullion. Though, for the same reason, when inflations occur or with rising industrial demand, silver bullion has potentially more short term upside than gold bullion so if you are a risk-taker silver bullion is a good choice. Its highs are very high; its lows are very low. If you can buy at a low and sell at a high, you win a lot. Gold bullion on the other hand seems more stable and it is an excellent hedge in troubled times.

We usually hear people counterfeiting gold but since silver bullion is much less costly than gold, counterfeiting silver is not lucrative. Hence, when you buy silver, there is less risk of getting counterfeit bars and coins than there is for gold bullion.Silver bullion like oil when consumed cannot be used again and hence is a very useful commodity. 

Silver bullion can be an effective means of expanding investment assets and preserving wealth against the consequences of inflation. Although the value of silver may vary, it has an intrinsic value that is unchallengeable and permanent. Accordingly, many experts suggest that investors should include it among their investment assets.

The commodity markets, specifically the silver bullion market, have outperformed both the stock and bond markets recently andwill continue to do so. Since 2000 if you would have invested your currency into gold you would have seen a 190% return on your money. If you would have invested your money into silver you would have seen a 240% return on your money. This is an important shift to recognize, yet very few individual investors are aware that this fundamental change in the marketplace has taken.

One of the most incredible truths about silver bullion is that up until now, demand has outstripped supply for fifteen straight years. Annual silver bullion supply deficits have run as high as 200 million ounces in boom years, and as low as 70 million ounces in years of recession like we are in now. It is important to realize that even in years of decreased silver demand the mining supply on an annual basis did not meet demand. There is nothing more bullish for a commodity than such a deficit condition.

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