G'day all

I have researched precious metals and for what it's worth, I believe that it makes an excellent investment. I prefer physical delivery as it is more "real" than paper.

I have some gold (would love more) but after some research I am starting to think that silver may offer a better investment.

Gold - traditional holder of value, undervalued but for a student still expensive

Silver - many industrial uses, stocks are very low compared to gold and replacement. very inexpensive and very affordable (even with the premium of having it in coin form).

I feel that gold is headed up in a big way. I have read one opinion which puts it at being worth $3000 US!!! Not sure about that being achieved in the near future though.

Anyhow Silver is much more affordable, is out of wack with it's traditional ratio with gold.

I would sincerely like to hear other peoples views on this

Thanks for your time

GCS15

I agree with most of your points. However, you have to be careful with "traditional ratios". I lost a bit of money this year going long on Palladium futures because its price had got so out of wack with that of Platinum (the two metals are largely interchangeable in industrial use). I thought that difference would have to correct. It didn't, it got steadily wider, and my positions stop lossed. Might not have mattered so much had I held physical, as could perhaps have taken a more long term view and held on.

Here in Oz silver is treated the same as gold regarding taxes. I see your point though. 17.5% is a large cost added onto your investment.

GCS15

Whats the process for buying silver in Australia, I'm interested in buying some. Do you have to pay GST on it or is it tax free. What about Gold purchased from the mint?

YES.
Silver COULD behave like Gold on steroids.

An interesting test for silver is coming up.
A 5 year cycle low is due in 2005-6. If we dont get it, and the price chart breaks out instead, we may see a parabolic rise to MUCH HIGHER levels, and a rise way beyond that of gold.

Here's a chart to demonstrate:

I like silver and own it, but it only constitutes a few % of my overall portfolio. The main argument for silver is the mining supply/demand deficit. For nearly 15 years, shortfalls in mined silver has had to be made up from above-ground stockpiles. To date, over 1 billion ounces has been drawn down and the pile is growing smaller by the year. The vast multi-billion ounce silver heap of the US government was exhausted a year or two ago and they now purchase on the open market for their silver eagles coin program.

I agree that more and more applications are being found for silver and that boosts demand, however I don't expect silver to rocket to $50 an ounce as it did in 1980 (silver is currently $7.22 as I write). That spike was accompanied by high inflation as interest rates approached 20%! Everyone thought fiat money was toast but it survived and silver has been working off the huge supply that came to the previous bull market.

My reason for holding silver is it's future return as money and a safe haven from inflation. We are in or near a new multi-decade reflation cycle and ally that with Peak Oil means hard assets will predominate for decades to come.

I have also started looking into Silver too!

Gold is already in my portfolio (thanks for the tip Dr. and now I am looking at purchasing Silver bullion.

Here in Hong Kong we can purchase Silver Tax Free! (Yep that right! NO VAT over here), so I will start collecting Silver bullion coins from now on.

There are lots of commentators out there who are predicting Silver to reach US$50 to even US$150 per-Ounce.

Who knows if they are going to be correct, but I think it is worth a few Quid (that is all it costs for Silver these days) for a bit of a gamble and just wait and see where it leads.

Cheers.

Good move. You can also buy silver VAT-free here in the UK too, fortunately.

where?? what sites do you suggest?

24carat.co.uk say VAT is still on silver..

Old scrap value British 50% silver coins. Ebay is full of them and they usually go for a few percent above spot if you bid sensibly.

British florins/shillings/half-crowns minted between 1920 and 1946 are 50% silver. Coins before that are 92.5% silver but command higher premiums and are rarer on ebay.

Happy bidding!