Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Institutional Investors Continue Gold and Silver Buying Spree

Commodities / Gold and Silver 2012 Apr 05, 2012 - 05:56 AM GMT

By: Anthony_David

Commodities

The global silver market was pretty shaken up in 2011 when silver bullion prices dropped from a high $49 to $32 and then again from $43 to $28. Investors around the world have been reacting differently to the price upheavals which triggered the most paranoia in October 2011. However, about 50% of investors have turned the fall into an opportunity and are aggressively buying the lower-priced silver. Considering the uncertain financial future, the decision to hold silver bullion instead of fiat currency certainly appears to be a wise one.


Silver prices are expected to remain volatile in 2012 as well. Analysts expect the market to mirror last year’s performance with sharp rises and falls and in fact, Barclays Capital has predicted that silver will be the most unpredictable of the precious metals. Although price predictions vary from $32/oz to $52/oz, the consensus seems to be in the mid-$30s. Analysts have also pointed out that traditional supply and demand rules are unlikely to drive prices. Instead, the only factors that would affect the silver market are market sentiment and investor behaviour.

For example, China’s mega-sized demand for silver is well-known, but given that the country’s trade deficit has been at its highest in more than two decades, fears of a slowdown are high. A weak Chinese economy means a lower silver demand.

Egon von Greyerz, founder and managing partner at Matterhorn Asset Management, said that silver was not for the faint hearted this year. His advice to investors, “My view is people should hold more gold than silver, but from a profit potential point of view, silver looks very much like it’s going to have a bigger move.” He said that while silver corrected more easily than gold, the correction seen in February is rather mild. He believes that when silver turns, it will run positive very quickly.

Speaking about gold, he said that there is a major demand for physical gold that is growing rapidly. He is confident that institutional money will enter the gold market aggressively and transform the market. During an interview last week, he said, “We are seeing the low this week or we could be under pressure for another week. But thereafter, in April, if I look at the technical picture, gold looks fantastic. The next move will be a major move in both gold and silver.”

He said that the paper market is artificially manipulated and is not relevant to the physical gold market in the long-term. However, physical gold is what people should invest in now and protect themselves from the volatile 2012 markets. He added “The institutional investors are going to go heavily into gold and that will totally change the market. As we know there isn’t enough physical gold around to satisfy an increase in demand, so that can only be satisfied by a higher price.”

Also speaking about gold, Caesar Bryan of Gabelli & Company said, “Well, there’s been a bit of a transfer from the paper players, those involved on the COMEX and in the futures market who have been liquidating. On the other hand, the physical buyers, including central banks, are stepping in to accumulate gold.” He added, “The central banks have been accumulating a great deal of physical gold at these lower levels. So there’s a bit of a tug of war going on between the futures market and the physical market.”

Among other opinions, Anne-Laure Tremblay, precious-metals strategist with BNP Paribas said, “Beyond the short term, we remain positive on gold’s outlook as the fundamentals are still solid.” The bank stated, “An improving macroeconomic outlook and high risk appetite should see silver outperform gold for most of H2’12 and 2013 although silver, like gold, remains vulnerable to waves of liquidation. As a result, the gold/silver ratio should decline to the low 40s by H2’13.”

BNP Paribas had forecast gold and silver prices in February and they stand by those predictions in March as well. The bank expects gold to sell at $1,850/oz in 2012 and $2,225/oz in 2013. Silver is expected to sell at $37.50 in 2012 and at $51 in 2013.

By Anthony David

http://www.criticalstrategicmetals.com

The mission of the Critical Strategic Metals Web Site

is to serve as a monthly compass for those who take a fundamental view of investment regarding the Molybdenum, Manganese and Magnesium metals markets, are concerned with the emerging critical under-supply of these strategic metals to Western nations and wish to profitability chart their course. Each month we will research and provide, in as short and concise a manner as possible, the most applicable information available on resources that will have the biggest impact on our day to day lives. Click here to sign-up for our FREE monthly report.

© 2012 Copyright  Anthony David- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife