Silver
We live in a dynamic, fast-paced world where change has become a routine part of our daily lives. The effects of changing government policies, shifting political alliances and mounting internal and external social pressures can and often combine in unforeseen ways to impact the economic health of our country and that of other nations.
Silver is unique among industrial commodities because it's also a store of value. Silver has a tremendous upside possibilities because of industrial demand plus investment demand. Currently, world demand for silver now exceeds its annual production. The U.S. government, once the largest holder of silver, no longer has a stockpile and now the U.S. government is a buyer of silver at prevailing world silver prices. At the precise time when the amount of investment buying power of silver is the highest in history, the amount of silver available per capital is the lowest in history. This is after 60 years of deficit consumption.
With new technologies, silver has found many new applications. Plasma television display screen can use up to one ounce of silver per screen. Rather than barcodes on rental products, smart tags made of silver are being used. To reflect the suns heat, windows are treated with a double layer of silver. Silver is also used for numerous high tech applications such as medical, electrical, pharmaceutical, and water purification industries. A lot of these technologies have only recently become available and commonplace for mainstream use is in global technology markets which are expected to grow rapidly.
Today silver plays an important role as both a financial investment and industrial material. Investment demand for silver in emerging markets in countries like China and India are strong. China represents the most important emerging market for silver and may rival U.S. and Japan in the coming years.
The extraordinarily fundamentals of the Silver Market suggest, at current prices, that investing in silver could offer investors one of the single best long-term investments today. It is no secret that both gold and silver are recognized as “flight to quality investments”.
New high-tech uses for silver will further strain already-tight supplies in the future. World demand for silver now exceeds annual production and has every year since 1990, depleting above-ground stockpiles of silver.
The loyal investors to the silver cause are no doubt excited at the recent price performance. While gold has demonstrated a solid trend of price appreciation since 2001, more than doubling in price, the price of silver has recently outperformed that of gold. We currently feel the explosive Silver Market has much more upside potential due to the uncertainty of US dollar, unstable housing market, national debt, and the war in Iraq.
Recent trends show that, between July 1, 2003 and November 30, 2006, the price of gold increased approximately 84%, while the price of silver increased more than 200%. Supplies of silver are quickly disappearing while worldwide market demand for silver is growing.
Gold
Gold has forever been attractive to mankind and has found its principal use as a store of value. It has become an industrial metal that people all over the world have depended on. Its beauty has made it popular as it can be shaped for decorations to adorn the body. For thousands of years gold has been almost universally acceptable as money, because of its durability and rarity.
The leading countries for producing gold are South Africa, followed by the United States, Australia and Canada. Several other countries around the world mine for gold.
The most commonly used precious metal is gold, as it is reluctant to enter into chemical reactions and will not react with common acids.
Mankind has sought after gold for ages and thus it has become the most famous precious metal. Gold is used for investment purposes, bartering, and exchange payment. Traditionally, it is used as a monetary instrument, a financial asset and raw material primarily used in jewelry and decorative objects.
During times of political, social, or economic distress, a gold investment is viewed as a financial asset that will maintain its value. Because of this, gold can provide individual and institutional investors with a portfolio safety net against sharp downward spikes.
The United States, Japan, Italy, India, China and Thailand are some of the countries where the majority of use for gold occurs. Jewelry is the largest use for gold and its production has been growing at an extremely fast pace in countries like Southeast Asia and the Middle East. This precious metal is also used in dental alloys and electronic connectors.
Over 4 billion ounces of gold had been extracted from the earth, and about 5 million ounces are presumed to exist in coinage, jewelry and bullion.
During the inflation periods or downturns in the economy, gold investment protects an investor’s portfolio. This precious metal is a tangible asset. Precious metals such as gold and silver often increase in value when stocks have a downward trend. In the year 2000 the price of gold nearly doubled while the United States dollar began to decline in value. For many years the economies of the world have been directly involved in geopolitical problems, specifically in the Middle East and because of this the currencies of respective countries are no longer considered stable. Since the terrorist attacks on the United States, investments are considered to be more risky in the U.S. dollar. Global investors feel more comfortable in purchasing gold, than holding onto United States dollars. The uncertainty of terrorism is worldwide and therefore currency is no longer considered a safe investment. Since precious metals are tangible assets that are impervious to terrorist attacks, investors are increasingly exchanging their currencies for precious metals because of the inherent safety.
Platinum
Platinum is a special metal with unique properties. Platinum was discovered much later than silver and gold, not until 1557, and not in abundance until 1750, when the Spaniards colonized the northern regions of South America.
Why buy Platinum?
Platinum‘s wear and tarnish resistance characteristics are well suited for making fine jewelry. The auto industry has a high demand for Platinum. In addition Platinum consumption is tied up in other industrial applications, such as glass, electronic, petroleum and chemical industries. Platinum is used for new and advanced technologies and is expected to see steady growth. Continued strong demand for jewelry will also drive the Platinum market higher.
Distinctive properties of Platinum include resistance to chemical attack, excellent high-temperature characteristics, and stable electrical properties. All these special properties have been used for industrial applications.
It is not hard to understand the historically strong value of platinum prices and the growing interest in platinum investment. Platinum is a relatively rare precious metal. All of the platinum ever mined throughout history would fit into a cube less than 25 feet on each side. The amount of platinum mined annually is less than 1/15th of annual gold production, and less than 1/150th of annual silver production. Approximately 90% of newly mined platinum comes from South Africa and the former Soviet republics.
Imagine what could happen to the platinum price when potentially increasing demand outstrips the extremely limited supply. Investment demand has prompted the U.S. Mint to take platinum off the world market to produce its American Eagle Platinum Coin.
Palladium
The unique properties of palladium and other PGMs account for their widespread use. One in four goods manufactured today either contain PGMs or had PGMs play a key role during their manufacturing process. Over half of the supply of palladium and its sister metal Platinum goes into catalytic converters, which convert up to 90% of harmful gases from auto exhaust (hydrocarbons, carbon monoxide and nitrogen oxide) into less harmful substances (nitrogen, carbon dioxide and water vapor). Palladium’s precious metal qualities and appearance generate significant consumption in the luxury jewelry market. Palladium is found in many electronics including computers, mobile phones, multi-layer ceramic capacitors, component plating, low voltage electrical contacts, and SED/OLED/LCD televisions. Palladium is also used in dentistry, medicine, hydrogen purification, chemical applications, groundwater treatment, and it plays a key role in the technology used for fuel cells, which combines hydrogen and oxygen to produce electricity, heat and water.
Palladium bullion has ISO currency codes of XPD and 964. Palladium is one of only four metals to have such codes, the others being gold, silver and platinum.
Ore deposits of palladium and other PGMs are rare, and the most extensive deposits have been found in the norite belt of the Bushveld Igneous Complex in the Transvaal in South Africa, the Stillwater Complex in Montana, USA, the Sudbury District of Ontario, Canada, and the Norilsk Complex in Russia. In addition to mining, recycling is also a source of palladium, mostly from scrapped catalytic converters. The numerous applications and limited supply sources of palladium result in palladium drawing considerable investment interest.
