Silver & Gold - The Difference at GoldSilver.com

Invest in Silver not Gold

I couldn't put it any more simply: If you don't own silver, get some soon.
Often looked upon as secondary to gold, silver is actually well on its way to becoming the rarest metal of them all.
Even more rare than platinum.
How?
Well, what most people don't realize is that while silver is valued for its use in coins, jewelry and decor, it's even more crucial as an industrial metal.
Everything from DVDs and cell-phone batteries to high-end microprocessors, electrical motors and super-conductors all require silver to function...
And every time it's used, it's gone... forever.
Which makes silver a disappearing element – an endangered species as far as metals go.
That's just part of the reason why silver was trading at just $5 as recently as 8 years ago... And a high of $50 mid 2011.
And while demand grows every day, supply just shrinks and shrinks and shrinks.
So as time goes by, prices won't just rise steadily... they'll rise faster and faster as the world silver supply moves towards zero.
Before long, $50 will be a bargain, and then a memory.
To get the jump on this shocking market trend – which most people don't even know about – get Wealth Daily's detailed report The Road to $200 Silver, right now.

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After getting your first free report, The Road to $200 Silver, you'll begin also begin to receive the Wealth Daily e-Letter, delivered to your inbox six times a week.
So become a Wealth Daily member today. It's free and there's absolutely no obligation—ever.

Source :  wealthdaily.com

What's Better: Gold or Silver?

Is silver undervalued?
On Monday, gold for December delivery finished trading at $810.80 an ounce, up 0.28 percent while silver settled at $14.785, a gain of 1.27 percent on the day.
Clearly, it was better to be an owner of silver than a gold bug. A long position in silver gained $930 per contract, while a gold contract brought in only $230.
When I saw this, I got to thinking about the gold/silver ratio which now stands at 55-to-1.
When coins were first minted by the Greeks two millennia ago, the ratio of gold to silver was a lot lower. Gold's value was closer to 10-to-1 then. In the 1930s and 1940s the ratio reached 90-to-1 and, by 1991, it peaked at about 98-to-1. Traders used to pay a lot more attention to the ratio as a clue to relative value, but nowadays, many claim the ratio is no longer relevant.
One fellow, an admitted silver bug, looks at the ratio with a fresh perspective. Theodore Butler, AKA "The Silver Seeker," takes a market capitalization point of view. Using data from the World Gold Council, the U.S. Geological Survey and the Silver Institute, Butler determined the history of "above ground" supplies of gold and silver over the past century to surprising effect.
Gold above ground amounts are easier to pinpoint than silver amounts, partly because gold is still held by world governments. Virtually none of it is ever destroyed by non-recoverable industrial consumption. Therefore, every ounce of gold that is mined annually is added to above ground total amounts. Some five billion ounces of the yellow metal are above ground, as of 2006, according to World Gold Council estimates.
Silver, however, is industrially consumed. According to Butler, more silver has been consumed in the past six decades than has been mined, even allowing for recycling. As of last year, the highest estimate for existing silver bullion equivalent (bullion plus "junk" coin) is one billion ounces, says Butler.

Butler's historical view of the gold/silver ratio looks like this:
.

Year   Gold Market Cap   Silver Market Cap Ratio (Price) Ratio (Market Cap)           1900 $20 Billion (1 billion oz. x $20) $8 Billion (12 billion oz. x 65 cents) 30 2.5 1950 $70 Billion (2 billion oz. x $35) $8 Billion (10 billion oz. x 80 cents) 44 9 1975 $450 Billion (3 billion oz. x $150) $20 Billion (5 billion oz. x $4) 38 23 2006 $3 Trillion (5 billion oz. x $600) $12 Billion (1 billion oz. x $12) 50 250

While the conventional gold/silver ratio comparison has changed comparatively little, the market cap ratio has increased 100- fold over the course of 106 years. This, Butler contends, makes the case for silver being grossly undervalued relative to gold nowadays.

Even more compelling is Butler's case stated on a per capita basis. Accounting for world population growth, there's a distinct disparity in metal availability:

Year World Population (billions) Gold Market Cap (billions) Silver Market Cap (billions)   Gold Per Capita   Silver Per Capita             1900 1.6 $20 $8 $13 $5 1950 2.5 $70 $8 $28 $3 1975 4.0 $450 $20 $113 $5 2006 6.5 $3,000 $12 $462 $2

"On a per capita dollar basis, the world's citizens have never owned more gold or less silver than they do today," says Butler.
Butler is quick to add that he's not saying that gold is overvalued or is set to head south. In fact,
says Butler, "the market cap of gold is most likely to continue to grow."
Still, the data leads The Silver Seeker to the certain conclusion that silver must, at some point, rise dramatically on both an absolute and relative basis versus gold.
Stay tuned.

source :  hardassetsinvestor.com

The Gold Price Down $25.10 for the Week Closing Today at $1,578.40

Gold Price Close Today : 1,578.40
Gold Price Close 29-Jun : 1,603.50
Change : -25.10 or -1.6%

Silver Price Close Today : 2688.9
Silver Price Close 29-Jun : 2758
Change : -69.10 or -2.5%

Gold Silver Ratio Today : 58.701
Gold Silver Ratio 29-Jun : 58.140
Change : 0.56 or 1.0%

Silver Gold Ratio : 0.01704
Silver Gold Ratio 29-Jun : 0.01720
Change : -0.00016 or -1.0%

Dow in Gold Dollars : $ 166.56
Dow in Gold Dollars 29-Jun : $ 166.05
Change : $ 0.51 or 0.3%

Dow in Gold Ounces : 8.057
Dow in Gold Ounces 29-Jun : 8.032
Change : 0.02 or 0.3%

Dow in Silver Ounces : 472.97
Dow in Silver Ounces 29-Jun : 467.01
Change : 5.96 or 1.3%

Dow Industrial : 12,717.60
Dow Industrial 29-Jun : 12,880.09
Change : -162.49 or -1.3%

S&P 500 : 1,348.79
S&P 500 29-Jun : 1,362.16
Change : -13.37 or -1.0%

US Dollar Index : 83.410
US Dollar Index 29-Jun : 81.627
Change : 1.783 or 2.2%

Source : Goldprice.org

Buying Silver vs. Gold as an Investment – What’s Better?

When I started trading commodities in the fall of 1990, the price of gold was $400 an ounce. From September of 1990 to September of 2005, the price of gold ranged from around $280 to $450 an ounce: a difference of $170 over 15 years. Over the course of any given year, a $40 to $50 move in the price would be considered a big – in a single year.
Nowadays, that’s an afternoon. Since September of 2005, the price of gold has been on a historic run – from $450 per ounce to a high of $1,875 per ounce in 2011. Now gold trades at around $1,650. The average investor probably didn’t pay much attention to the first part of the rally in gold, but once it convincingly crossed $1,000 in 2009, most market watchers keep an eye on gold along with the Dow, the S&P 500, and the price of crude oil.
What was once only watched by central banks, insurance companies, and gold miners suddenly has become as mainstream as IBM and Microsoft. In fact, I would say that gold is even bigger. Indeed, it’s arguable that gold has become the world’s third most important currency. As the financial crisis of 2007-2009 unfolded, many people flocked to gold as a “safe haven” investment. The average small retail investor can easily invest in gold through exchange traded funds, or ETFs.
But what about other precious metals? What about silver? Silver has had an impressive run up in price as well, and may even have more upside than gold over the coming months and years.

The Market for Silver and Gold

Silver had an incredible run, just like gold, from 2005 to 2011. It went from having a value of approximately $7 per troy ounce to $35 per ounce over that time period. In percentage terms, that’s even bigger than the gold move.

Industrial, Commercial, and Consumer Demand

Silver has many traditional industrial uses. Historically, silver was a key component in film used in most cameras. The rise of digital cameras, however, has practically made film obsolete, but the development of cell phones and other technology has helped fill the void.

Silver is used in virtually every electrical appliance in the world due to its low resistivity. Photovoltaics, the method by which solar radiation is converted to electrical power, requires silver for both semiconductors and solar panels. There is growing use of silver in the medical profession, as silver has antibacterial properties. Other new silver applications include use in wood preservatives, water purification, and food hygiene. Everyday items, such as refrigerators, mobile phones, computers, washing machines, vacuum cleaners, keyboards, counter tops, and even clothing contain varying amounts of silver.
Gold, on the other hand, has limited industrial uses. Jewelry, particularly in developing countries like India, accounts for over two-thirds of annual gold demand. Dental and medical applications account for about 12% of demand. But one has to wonder: If the price of gold keeps going up, at what point will demand decline because it’s too expensive? For example, will consumers in developing countries continue to buy jewelry if gold goes to $2,500 or $3,000 an ounce?
Even luxury items have a point at which people stop purchasing them. Products like consumer electronics and solar technology, however, seem to still have tremendous upside. This is because they use silver which is still quite reasonably priced, relatively speaking. Though the rise in the cost of silver is equal to or greater than gold in percentage terms, it’s still just over $30 an ounce. Therefore, it seems unlikely that cost will be a limiting factor when it comes to the industrial uses for silver. The same, however, can not be said for gold.

Central Banks, Fear, and Financial Stress

As stated previously, gold is viewed as a store of value, and rightly so. History tells us that having too many investments denominated in one currency is a recipe for disaster. As gold has risen in value over the last decade, the value of the U.S. dollar has declined. This is due to two main factors:

1. The U.S. government has had to pump so much money into our economy that the value of the dollar is diminished.
2. Countries, such as China, that hold trillions of dollars in U.S. bonds, are concerned that they have too much money invested in dollar denominated assets. So what do they do? They buy gold, essentially swapping some of their dollar risk for gold risk.

Silver and other precious metals, such as platinum and palladium, have also benefited from the stress caused by the recent financial crisis. While gold is still the preferred vehicle as a hedge against fear, silver has a growing appeal as a safe haven. As investing in silver becomes easier, more people may try to take advantage of that play to protect their portfolio.

Source :  http://www.moneycrashers.com

GOLD MONEY AND FIAT CURRENCY

Everyone uses paper currency and yet few people possess gold, the money used since before Biblical times and throughout Egyptian and and Roman eras, to pay for goods and services. When paper printing became widely available, receipts were sometimes issued for gold deposited in vaults. Eventually, the paper receipts were found to be more easily traded than the physical gold. Now no paper money in the world is backed by gold (or silver), everyone knows it has great value, and yet few people have traded their paper currency for any of the yellow metal. Today gold remains scarce enough to inspire fever, passion, and still many investors remain indifferent. With declining mining reserves, increased investor demand, China converting their currency to gold, and increased purchasing of citizens of India, it has become more difficult to find. Many experts anticipate a return to gold and silver for backing future money.

EVERYDAY GOLD:
Gold is found in jewelry, coins, electronics and even on the U.S. Capitol dome. While 24k (karat) gold is soft enough to be pounded into thin sheets of gold leaf, it is too soft to be handled roughly without deforming. Hardening by alloying with copper, silver or other base metals is the common solution. While pure gold is designated as 24k, other common alloys are 22k, 18k, and 14k. For example, if you have an 18k necklace, to find the gold ratio, you can divide 18k by 24k. This calculation shows that you have a item which contains 75% gold.

GOLD COINS:
Most gold coins in circulation since the 14th century were minted in a 22k alloy; the remainder of the metal alloy is copper. However, newer bullion coins are sometimes pure 24k gold, while the U.S. Gold Eagle, the British Sovereign, and the South African Krugerrand continue to be traded due to their ability to withstand handling. Pure gold coins, however, have a luster that is often more attractive to gold purchasers. The gold Canadian Maple Leaf coin, at 99.99% pure, enjoyed higher demand until the U.S. Mint issued the Buffalo pure gold bullion coin.

REASONS FOR OWNING GOLD:
Gold can be used around the world as money; It is easily recognizable and crosses almost all language barriers effortlessly. Or, it can be traded for local currency in almost every corner of the world. Many fans of gold coins or bars speak of using them to hedge against economic or political difficulties.

JUNK GOLD SALES:
In the United States, many are consolidating their junk necklaces, rings and gold crowns, and converting them into paper currency through various services. Coin shops and other businesses will often exchange the gold for U.S. dollars.

TIMELESSNESS OF GOLD:
Gold has been so coveted that it has been linked to a variety of symbolisms and ideologies. Its bright yellow color and luster found to be alluring since before humans started recording history. It maintains appearance and value by not oxidizing in air or water.

INDUSTRY AND ELECTRONICS:
Gold is so malleable that it can be made into thread and used in embroidery. It can also be pounded so thinly that fine coatings are used in electronics. Although silver is the best conductor of electricity, where conditions are harsh (like in outer space), gold is a better choice.

MINING:
Initially, gold was most often found in naturally occurring nuggets or fine grains. Later, miners refined their techniques to seek gold in veins and in alluvial deposits near rivers and streams. While gold is often recovered and recycled, it is most often mined in large open pit or hard rock underground mines. Deposits with a few grams (a few large paper clips) per ton are profitable to extract.  It is believed that about 50% of refined gold deposits, have been from South African ore. Recently China, however, overtook South Africa in current gold production. The United States, Peru, Russia and Australia comprise the rest of the majority of gold mining. In the U.S., South Dakota and Nevada supply two-thirds of the ore processed for the extraction of gold.

GOLD PRICES:
Gold is most often measured using grams, with 31.1 grams in a troy ounce, with 28.35 grams in an avoirdupois ounce. The price per gram is determined using Gold Fixing in London, which was created in in 1919 to provide a common world price. The U.S. Government enjoyed a troy ounce value of $20.67. Then in 1934 Franklin Delano Roosevelt devalued gold to $35.00 per troy ounce. President Nixon eventually took the U.S. off the gold standard in 1971, which allowed the market price of gold to trend much higher.

PLATINUM AND PALLADIUM:
About 8 million troy ounces of Palladium are mined and refined each year, making it about 10 times as rare as gold.  Much of palladium is consumed for industrial uses, such as catalytic converters which help reduce car exhaust emissions. Many consider it to be a "green" metal, environmentally friendly. Platinum has many of the same properties of palladium and is even more rare and more expensive.

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**Jason Hommel from jhmint.com and silverstockreport.com was recently interviewed by his local newspaper. So I don't have to re-invent the wheel, excerpts from his article are below:

SILVER CONTENT:
People often ask us about the silver content in old US coinage, in quarters, half dollars, and dimes minted in 1964 or earlier. The metal content consists of 90% silver, and 10% copper -- that's called the purity level.  But one dollar's worth of coinage contains just under 72% of one troy ounce of silver -- that's the measure of the weight.  People get the two things mixed up, and they have difficulty with the math, not knowing what amount to multiply or divide against the silver value per ounce.

And there are other things that affect the value, too.  Old coinage can be sold in bulk in bags of $1000 face value at a time, and so, there are better prices if you can trade in bulk.  But if the coins are very worn out, or if you have only a few coins, you won't get such a good price.

DETERMINING VALUE:
To figure out a rough value, figure that a large bag weighing about 55 pounds, and containing $1000 face value of silver coinage, will have about 715+ ounces of silver.  Then, multiply the ounces by a percent or two under the spot price of silver, and that's about what it's worth, but even that varies, depending on market conditions.  Sometimes, 90% silver can trade above spot, and I've seen it as high as about 30% above spot, but not in today's calm market.

Because many people find it confusing to calculate the value of 90% coinage, most people prefer to own 99.9% pure, 1 troy ounce "rounds" that are a bit heavier than the old silver dollars, that contained about 76% of 1 troy ounce of 90% pure silver.  They are called "rounds" because they are privately minted, and not issued by the US government, which would make them coins.

Many people wonder if they own any rare coins in their old coin collections.  Most people just own junk.  A general rule is that unless it's silver, gold, and a US coin in very good condition, then forget about it.  Foreign coins are typically worthless, unless they are silver or gold.  Most pennies and nickels are hardly worth the time to look through.

California State government levies a sales tax on bullion purchases under $1500, but over that, sales tax is not charged.  The Federal government requires a "CTR", or cash transaction report on anything over $10,000, and so many buyers tend to buy just under that limit for the sake of personal privacy.  Wire transfers are often used for amounts over that.

GOLD AND SILVER SPREADS:
People also wonder about dealer markups, or the spread.  Gold and silver both cost about 9-10% over the spot price when you buy, and when you sell it back, you can usually get about spot, or maybe 1-3% under.   Many people think that's a wide spread, but the true profits for the dealer is often much less, due to the volatility, regular business operating costs such as rent, wages, advertising, minting costs, and the fact that re-ordering inventory from mints or other wholesalers requires placing orders in bulk.

Around 9% over spot is very cheap.  Historically speaking, when silver was the circulating currency during the great depression, the U.S. government bought silver from miners at 29 cents per ounce, and then turned that into $1.40 worth of coinage!  That's about a 400% premium over the cost of the silver, so a 9% markup is great by comparison!  The difference can be explained by the government monopoly verses the lower costs created by free market competition.  The bullion market today is very competitive.  Charge more, you lose customers.  Charge less, and you risk taking a big loss due to the volatility and all the other costs.

It can cost over $2.00 per oz. just to mint a 1 oz. round at many of the smaller private mints.  With our narrow spread, and the volatility, and the normal 1-2 day delay of putting cash into the bank to re-order, we lose money on some trades, but that's just the normal risk of doing business.

SILVER VERSUS GOLD:
Most people just don't understand how small the silver market really is.  World silver mines produce about 600 million oz. of silver per year, with most of that going to industry.  Investors buy only about 100 million oz., but at $18/oz., that's barely $1.8 billion per year.  In the scale of world finance, that's nothing.  With dealer profits of about 2-3% of that, after costs, the entire silver investment market earns barely $30 million per year, across all dealers, worldwide!  Without gold sales and scrap gold purchases, we'd go broke!

PAPER CURRENCY vs. GOLD / SILVER BULLION:
Some people really wonder how we can accept inherently worthless cash for real gold, after all, the JH Mint can't back up all the paper money that the banks have printed.  Well, as long as the families of the miners and the refiners still want and use paper cash to pay their bills, you can still get the stuff.  Watch out for the day that the miners decide they want to be paid in silver rounds! 


Source : goldismoney.com/

Why Buy Silver?

• There is currently less investment-grade silver available on Earth for investors to buy than there is gold.
• Today, there is only enough investment-grade silver on Earth for every person to have 1/14^th of an ounce.
• Silver is a 'miracle metal'. It is second only to oil as the world's most useful commodity.
• Aside from being money, silver has thousands of essential industrial uses. Silver is the most electrically conductive, thermally resistant, and reflective metal on the planet that has no known substitutes.
• For the past 30 years the world has used up more silver than has been mined, and today silver inventories are near all time record low levels.