Why is it time to buy silver now technically and fundamentally?

Question

I am doing a research on what caused silver to keep rising and even go higher for the rest of the year. Please elaborate.

Answer 1

This applies to gold as well. The main reason precious metals are going up in cost is that the dollar is weakening. When currency weakens the value of commodoties increases, and it's always that way. People buy commodoties because they fear that their paper money is worth less, so the price is spiked. That's the short and sweet of it. I would buy it now, before it goes any higher. They have predicted the dollar is going to weaken even more, so commodoties will go up in response. If you buy it before the price goes up you have a better chance of getting your money's worth. Good luck and happy investing!

Answer 2

You must mean the Lone Ranger's horse.

No, just kidding, and I'm now going to get serious.

If the metals (which silver is a part of) keep going skyward, it spells economic disaster in the cards.

Traditionally as an investment it didn't do much except for certain time periods (like the late 1960's to the late 1970's).

It's difficult to see where it will repeat that kind of amazing performance in the next few years.

Maybe, or maybe not.

I would make a good guess that it would take important disasters that make even Katrina look small to create a panic in the global markets and send the price of the metals to the stratosphere.

Not saying it couldn't happen, just it seems a longshot.

They used to say that silver was important in industry, especially photography, and that should make the price go higher and higher.

"They" were wrong. Technology created all kinds of breakthroughs in photography, so silver remains just a low end precious metal.

To see it go from around $5.00 to $10.00 in two years is kind of stretching.

I once stood on line to cash in some old silver I had when it shot up from around $6.00 an ounce to $40.00 in one week.

That was when the Hunt Brothers from Texas cornered the market (around 1980).

It quickly dropped to it's current level where it seems comfortable at.

So my answer for silver becoming a new wonder has to be ...No.

Answer 3

Fundamentally silver, gold and commodities are in a bull market. To know exact reasons you have to look at past 25 or 30 years. All these years USD was the almighty and continuously gone up against many third world countries (Commodities countries). That has created lower prices for commodities all these years. However from 2000 (after high tech bubble) markets are looking for alternative to USD (US Dollar).

So everything is going up in US dollar terms. Rest of the world is not ready for their currency to appreciate (For many reasons including to help their own exporters to US).

But as of now silver, gold are over heated (for short term). You have to wait for buying or buy and don't look at market for one year.

Read more about these at www.uscommoditiestrader.com

Answer 4

Here are the fundamental reasons to invest in gold or silver soon (in summary form):

1. Gold is more than just another commodity, it’s a currency. It is THE currency that evolved in the marketplace over the last 5,000 years.

2. Gold and silver are the only currencies not created and controlled by governments. All of today’s other currencies (dollars, euros, yen, pounds, renminbis, rupees, etc) are ‘fiat’ currencies, which means they do not represent anything tangible but are only worth something due to government decree (namely legal tender laws).

3. Governments always end up creating too much fiat currency out of thin air. All fiat currencies in the past have ended up worth very little, collapsing into hyperinflation or threatening to. All of today’s fiat currencies have been fiat currencies for less than 34 years (all government currencies were convertible to gold until 1971).

4. The rate of creation of fiat currency accelerated markedly in 1995, leading to today’s worldwide bubble in asset prices. In September 2003 the rate started to slow, suggesting that the bubble might end soon.

5. In the pain of the post-bubble period, governments will come under pressure to return to backing their currencies with gold.

6. Returning to currencies backed by gold is practical. Even the possibility that it might happen will cause the value of gold to rise considerably.

7. Today’s fiat currencies are unfair. For example, because the US issues the world’s reserve currency, the rest of the world sends the US real goods and services and just receives bits of paper or electronic bookkeeping entries in return—many ships travel to the US full of goods, but return half empty.

8. Governments and central banks have been suppressing the price of gold since 1995 by lending and selling their gold. They won’t be able to keep it up forever. Then the price of gold and silver will soar.

9. The pressures of enormous debts will increasingly tempt the United States to inflate the US dollar so much that it will become almost worthless, in order that the debts can be easily repaid in near-worthless dollars. Gold will gain as the falling US dollar destroys trust in fiat currencies.

10. The finance industry and governments have promoted fiat currencies at the expense of gold in the public’s mind for decades. From here, the investing public’s attitude to gold can only become more positive.

Historically, one of the best ways investors have protected themselves against a faltering currency is to purchase gold and silver.

Gold and silver, therefore, are competitors against the dollar and all other forms of paper money. And because of this, when the values of paper currencies like the dollar decline, gold and silver prices increase. That’s what’s been happening for the last 90 years, during which time the value of the dollar has fallen a stunning 95% against gold. Or, to put things in a slightly different perspective, during this 90-year period, gold has moved from US$20.67/ounce to US$450/ounce, an increase of 2,100%! This is the fundamental reason why gold and other precious metals should always be in your portfolio.

TECHNICAL REASONS:

Gold and silver have languishd from 1980 to 2000 and are now starting a fresh upmove which is expected to continue.