Silver Provides Silver Lining

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..... Silver Provides Silver Lining
By: - Dr. Sanjiv Agarwal
Other Topics
Dated:- 31-5-2011

We are witnessing the huge appetite for investments in gold and silver by investors across the globe for the simple reason that investment in such commodities have appreciated handsomely as compared to other asset classes, particularly in last few years. While gold appreciated by over 60 percen .....

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..... t in last three years, the prices of silver have shot up surprisingly by over 220 percent, though it has been marked up with volatility. As reports suggest, silver has the tendency of moving upwards with economic growth and has an increased industrial consumption. Such phenomenal rise in silver was earlier witnessed in 1993, 1997 and 2006 also when it outperformed appreciation in gold. If we look .....

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..... at prices in last decade, while BSE sensex rose of by 360 percent and gold by 380 percent, silver saw appreciation of over 660 percent in last ten years. Industrial countries have been net importer of silver, particularity countries likeChina. This is one of the main reasons for rise in silver prices. Sliver is also seen as an alternative or proxy to gold investment. It also serves as a hedge ag .....

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..... ainst inflation but of course, second to gold. The crises of middle east and European debt situation in also responsible for such prices behavior. Though the appreciation in silver prices could have been faster than gold in last one year, yet it remains next to gold to provide cushion against risks. Moreover, volatility would be witnessed more in sliver than gold. The rising prices of silver su .....

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..... ggest thatIndiashould move on the path of introducing silver funds (just like gold ETFs) which would bring silver at today's prices within the reach of masses and retail investors. World over, silver ATFs are doing well and can be a good platform for investors who do not want volatility. Going by the present experience of silver going upto over Rs 75000 per kg in last month and now ruling at aroun .....

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..... d Rs 55000 - Rs 60000 a kg, it is felt that the prevailing prices may see a further correction of 5-10 percent but price crash does not seem to be obvious. Silver has to be invested in on long term perspective as any short term call could prove to be fatal. Investing in sliver would make sense if made from a long term perspective as short term prices in silver could suffer from speculation, volati .....

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..... lity and excessive profit taking/ short selling on occasions. It appears that silver may consolidate around Rs 55000 which is the current resistance level with individual demand likely to pick up in next festive season alongwith silver ware. It may again get steady in next few months. Investors in silver should continue to stay invested with long term perception in mind. The price of silver has .....

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..... started recovering and investment demand will be the key driver. It is expected that eventually gold and silver will prove to be the only true safe haven for savings….. in long run. Reply By DEV KUMAR KOTHARI as = Yes, I agree with Dr. Agarwal that there should be mutual funds or SILVER ETFS. In fact I suggest that there should be mixed mutual funds for precious metals to balance risks. .....

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..... Aat least there can be a mutual fund for say 80% gold and 20% silver. Long-term investment in gold and silver is good as a part of total portfolio. Gold, silver, precious stones, and landed properties are necessary part of a blanced portfolio for any individual or family. However ,in the days of high trading and high speculation in every thing (including real estate) investors have to be very c .....

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..... areful to make investmetn at a time when the speculative gains are less and the market is in bearish mood. When price of onions can fall to about 10% of the peak price, onw need to be very careful. There are many stories spread like silver production is about 10% of gold, consumption of gold is very limited whereas silver is consumed- consumption create demand for consumption and investmetn both .....

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..... .. etc. reality of such stories need to be established and investors should not swayed by sudden positive factors to make investment in a bullish market. Experience shows that investors gain handsomely when they make investment in a bearing market for long -term investment purposes. A purchase action in bullish market is mostly costly and it may give gain in short term (if it is booked) but in l .....

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..... ong term any thing purchased in hot up bullish market is is likely to result into losses. So beware of speculators and market stories causing more frenzied buyings. Dated: 7-6-2011
Scholarly articles for knowledge sharing by authors, experts, professionals .....

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