Why we are sticking with silver as our top pick for 2012
Silver is the most volatile of metals in terms of price and 2011 was no exception to that rule. We have been down 20 per cent, up 67 per cent and will likely end the year just in the positive column.
Gold was less volatile ending up almost 20 per cent but well off its high for the year of $1,923 – close to but not above the $2,000 target set by goldbugs and 42 per cent up on prices at the start of the year. It is by far the best performing major asset class this year.
Silver price swings
However, of course if you had jumped ship in April and sold silver you would have still made a better return than gold. ArabianMoney thinks this outperformance is significant and a pointer to a greater potential for gain in silver than gold over the twelve months now in front of us.
Silver is currently rather depressed in relation to its recent high, and unless we have seen the end of the 11-year bull market for precious metals then ought to be consolidating for another leap higher. That has been the pattern of volatile, wild price swings that we have come to expect from this precious metal.
So buy silver now and you are on the right side of this particular curve. Gold also clearly has room to pass its all-time high set this year and jump through $2,000 an ounce. But that could still trail the percentage gain in silver.
Of course we could again be tripped up by a big price jump in silver and then see it sell down just in time to screw up our annual performance calculation. But in 2011 silver was at one point showing by far the greatest gain of any asset class in a very difficult year for most investments. That should not be forgotten and the recent price fall is therefore a major buying opportunity.
No slam dunk
However, that does not mean that silver is sell-off proof at these levels. Should we get the eurozone financial implosion that looks possible in Q1 with around $2 trillion in bond refinancings then gold and silver will most likely get sold down with everything else.
Investors in precious metals do not get their returns that easily. Buy now and you take this risk. Buy later and you might miss these prices if nothing much happens in the eurozone or if they actually sort things out.
But over the whole of 2012 we stay very positive about the outlook for precious metals as the money printing that has supported investment in money that cannot be printed continues with QE3, the ECB, IMF and the Bank of Japan waiting in the wings. For our thoughts on the best way to invest in precious metals you should turn to the January edition of the ArabianMoney investment newsletter (subscribe here).
Original source
Gold was less volatile ending up almost 20 per cent but well off its high for the year of $1,923 – close to but not above the $2,000 target set by goldbugs and 42 per cent up on prices at the start of the year. It is by far the best performing major asset class this year.
Silver price swings
However, of course if you had jumped ship in April and sold silver you would have still made a better return than gold. ArabianMoney thinks this outperformance is significant and a pointer to a greater potential for gain in silver than gold over the twelve months now in front of us.
Silver is currently rather depressed in relation to its recent high, and unless we have seen the end of the 11-year bull market for precious metals then ought to be consolidating for another leap higher. That has been the pattern of volatile, wild price swings that we have come to expect from this precious metal.
So buy silver now and you are on the right side of this particular curve. Gold also clearly has room to pass its all-time high set this year and jump through $2,000 an ounce. But that could still trail the percentage gain in silver.
Of course we could again be tripped up by a big price jump in silver and then see it sell down just in time to screw up our annual performance calculation. But in 2011 silver was at one point showing by far the greatest gain of any asset class in a very difficult year for most investments. That should not be forgotten and the recent price fall is therefore a major buying opportunity.
No slam dunk
However, that does not mean that silver is sell-off proof at these levels. Should we get the eurozone financial implosion that looks possible in Q1 with around $2 trillion in bond refinancings then gold and silver will most likely get sold down with everything else.
Investors in precious metals do not get their returns that easily. Buy now and you take this risk. Buy later and you might miss these prices if nothing much happens in the eurozone or if they actually sort things out.
But over the whole of 2012 we stay very positive about the outlook for precious metals as the money printing that has supported investment in money that cannot be printed continues with QE3, the ECB, IMF and the Bank of Japan waiting in the wings. For our thoughts on the best way to invest in precious metals you should turn to the January edition of the ArabianMoney investment newsletter (subscribe here).
Original source
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