Best of the Week
Most Popular
1.Oil Wars 2016 - US vs Russia vs Saudi Arabia vs Iran - Nadeem_Walayat
2.Crude Oil Price Crash Triggering Global Instability, Trend Forecast 2016 - Nadeem_Walayat
3.Stock Market Crash - Last Week was The 2nd and Final Warning... - Clive_Maund
4.Stock Market Crash Apocalypse or Bull Market Severe Correction? - Nadeem_Walayat
5.TShipping Said to Have Ceased… Is the Worldwide Economy Grinding to a Halt? - Jeff_Berwick
6.Crude Oil Price Crash Catastrophe, Independant Scotland Literally Begging to Rejoin the UK - Nadeem_Walayat
7.Summers: Global Economy Can't Withstand Four 2016 Fed Hikes - Bloomberg
8.Gold And Silver: New World Order: Public Be Damned, Preferably Dead - Michael_Noonan
9.Rigged U.S. Ttreasury Bond Market Double Barreled Hidden Q.E. To Infinity - Jim_Willie_CB
10.Major Stocks Bear Market Awakening - Zeal_LLC
Last 5 days
Top Silver Mining CEO: Don't Laugh, We Could See Silver $100+ - 8th Feb 16
Gold, Investment Leadership Changes Permanent? - 8th Feb 16
Stock Market Panic Decline Begins... - 8th Feb 16
How to Save Money By Growing Your Own Homegrown Tomatoes Indoors From Seeds - 8th Feb 16
US Economy Slides One Step Further Towards A Recession - 8th Feb 16
Gold Bear Market Bottom : Mr. Bear has left the PM Sector for Greener Pastures - 8th Feb 16
Stock Market At Important Support - 8th Feb 16
David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - 8th Feb 16
Why Crude Oil Prices Could Continue FALLING From Here - 7th Feb 16
Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - 7th Feb 16
Stocks Bear Market Continues - 7th Feb 16
Silver COT Paving Way for Sustained Upside Breakout Sharp Rally - 7th Feb 16
US Dollar Double Top, Gold Prospects Brightening Rapidly - 7th Feb 16
Gold And Silver - Is A Bottom In? Nothing Confirmed - 7th Feb 16
Gold Stocks Something has Changed - 6th Feb 16
UK Interest Rates, Economy GDP Forecasts 2016 and 2017 - 6th Feb 16
Gold Price, Mining Stocks Rocket Higher - 5th Feb 16
Crude Oil Price Bottoms and Blues - 5th Feb 16
Gold and Silver: Ripe for a Recovery! China May well Change the Game - 5th Feb 16
How Pension Plans are Responding to Financial Repression - 5th Feb 16
Senior Gold Producer Goldcorp Takes Large Stake in Nevada's Gold Standard Ventures - 5th Feb 16
Tips for Smart Oil and Natural Gas Investing 2016 - 5th Feb 16
Another Corporate Giant Is Leaving the U.S. – What This Means for You - 4th Feb 16
TPP is Economic Warfare, Trade Can Make Everyone Worse Off / Governments are Stupid - 4th Feb 16
Gold and Stock Markets Inflection Points Galore - 4th Feb 16
Putin Cries Dyadya (Uncle), Is Saudi Arabia Listening? - 4th Feb 16
Gold Price Golden Bottom? Video - 4th Feb 16
Look North for Value-Priced Growth in Healthcare Biotech Stocks - 4th Feb 16 - TLSReport
BrExit EU Referendum - Britain's FINAL Chance for Freedom From Emerging European Superstate - 4th Feb 16
HUI Now Confirming Gold Price Move Higher - 4th Feb 16
Crude Oil Price Forecast 2016 As Good As It Gets - 4th Feb 16
Gold and Silver More 'Flight To Safety' Active February - 3rd Feb 16
Raytheon Company: A Defensive Stock for a Defensive Market - 3rd Feb 16
Is Silver Really a Weak Link - 3rd Feb 16
Gold to Beat Stocks 2016? - 3rd Feb 16
David Chamberlain Cameron, Britain's Last Chance for Freedom From Emerging European Super State - 3rd Feb 16
EU UK Draft or Daft Agreement By Donald Tusk to Members of the European Council in Full - 2nd Feb 16
Europe: Why It's Going to Get a Lot Worse Before It Gets Better - 2nd Feb 16
The Next Generational Bust Is Coming, Stock Market 70% Collapse - 2nd Feb 16
The Coming Stock Market Decline May be a Monster - 2nd Feb 16
S&P 500 Has Likely Entered a New Bear Phase - 2nd Feb 16
How and Why To Move Your Assets Offshore Before the Financial Collapse - 2nd Feb 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Financial Crisis 2016

Special Report: How to Buy Silver

Commodities / Gold and Silver 2012 May 15, 2012 - 08:08 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleLarry D. Spears writes: In late December, silver dipped to a 12-month low near $26 an ounce, and traders who responded to the barrage of "buy" recommendations were quickly rewarded as the metal soared to a high of $37.18 just two months later.

Today, silver has pulled back below $29 an ounce, giving investors another chance to establish a position before the metal makes its next move higher.


After all, the fundamental case for silver prices remains as strong as ever.

The U.S. dollar continues to weaken, inflation remains a concern, silver demand from industry and emerging markets remains strong even as supply shrinks - plus we're facing growing uncertainty over the outcome of the 2012 elections.

It's a perfect recipe for higher silver prices - most likely even higher than last year's peak at $50 per ounce.

But what's the best way to play the next upmove by the "poor man's precious metal"?

For the purist seeking to hold metals as a long-term store of value and a hedge against inflation and global turmoil, the first choice is always the physical silver itself.

How to Buy Silver
For the smaller investor, this typically means one-ounce silver bars or half-ounce or one-ounce silver bullion coins - examples of the latter being the American Silver Eagle, the Canadian Silver Maple Leaf, the Chinese Silver Panda and the Australian Silver Koala.

These are produced by private mints and governments around the globe. The prices typically track the spot price of silver, plus a premium of 8% to 10% for bullion bars and up to 16% for coins, which covers the cost of minting and fabrication. The actual mark-up varies from coin to coin depending on the purity of the silver used, with Canada's Silver Maple Leaf being highest at 99.99% pure.

Larger investors can reduce the premiums to as little as 4% or 5% by purchasing the five-ounce, 10-ounce or one-kilogram coins offered by some mints, or buying 10-ounce or 100-ounce silver bars.

Be aware, however, that the premiums for all sizes will be considerably higher if you buy in small quantities or want to pay by credit card rather than with a bank draft or funds transfer.

For example, late last week, one leading U.S. dealer quoted 10 one-ounce Morgan silver bars at $31.16 each if purchased with a credit card, but priced 100 bars bought with a wire transfer at just $30.08 each. The premium on the two purchases over the spot price at the time was thus 7.98% versus just 4.23%.

Choosing a Silver Dealer
However you choose to buy physical silver, gold or other precious metals, the most important rule is to deal only with reputable dealers who have proven experience in the business and clearly stated policies and warranties - especially if you're purchasing by phone or online.

Several long-standing firms in the United States with solid reputations include:

•American Precious Metals Exchange (apmex.com) - This Oklahoma City-based firm offers both bullion and collectible metals products, as well as storage facilities. Quotes are updated every 15 minutes during trading hours. Purchase online or call 1-800-375-9006.
•Asset Strategies International (ASI) (assetstrategies.com) - This Rockville, MD firm has a large inventory of silver bullion products, and also offers regular metals markets commentary and analysis on its website. Sales representatives are available at 1-800-831-0007.
•Gainesville Coins (gainesvillecoins.com) - Based in Lutz, FL, they provide an extensive selection of silver coins and bars that can be reviewed online or purchased via phone at 1-813-482-9300.
•Kitco (kitco.com) - One of the world's largest metals dealers with offices in New York, Montreal, Hong Kong and elsewhere, Kitco provides a wide range of products and services, including real-time quotes and news updates. Purchases can be made online or by calling 1-877-775-4826.
•SilverTowne (silvertowne.com) - Founded in 1949, this Indiana-based firm specializes in all types of investment silver, from collectible coins to silver bars in varied weights. Phone: 1-877-477-2646.
•The Tulving Co. (tulving.com) - Based in Newport Beach, CA, Tulving provides 24-hour sales and service, tracking trading and price quotes in markets around the globe. U.S. and Canadian investors can call 1-800-995-1708.

Physical silver provides a long-term store of value, but it does carry some added risks - one of them being the potential for confiscation.

That possibility, similar to what happened with gold in 1933, is quite real. As such, if you're seriously considering silver as a hedge against future U.S. problems, you might consider choosing Canada or elsewhere offshore as a storage site for your metal.

Also, while it's easy to both buy and sell bars and coins with any of the above dealers, they're still a bit cumbersome for trading purposes, what with price mark-ups, storage, shipping and insurance costs.

How to Trade Silver
The ultimate trading vehicle is the silver futures contract - the most popular are listed on the COMEX Division of the Chicago's CME Group.

However, that's a high-dollar/high-risk instrument. A silver contract represents 5,000 ounces of silver, meaning a single contract is worth $144,300 or more at current prices. It also means a move like the $2.221 drop we saw on April 4 could cost you $11,105 in a single day - and that wasn't even the biggest one-day decline this year. Plus, you have to put up a margin deposit of $18,900 just to buy (or sell) one in the first place.

There are smaller U.S.-traded silver futures, but at 2,500 and 1,000 ounces, they still carry a high risk, amplified by lower liquidity, and require proportionately high purchase margins. Costs and risks, though limited, are also quite high for options on silver futures.

As such, a better vehicle for smaller investors wishing to play silver's next rally - or merely to hold as a longer-term proxy for the metal itself - is one of the exchange-traded funds (ETFs) or notes (ETNs) with shares backed by actual bullion.

The largest and most popular of these funds is the iShares Silver Trust ETF (NYSEArca: SLV), recent price $28.08. Its share price closely tracks the price of a single ounce of silver, usually trading at just a slight discount. As of the end of March, SLV held roughly 312 million ounces of actual silver, and it has a market cap of around $9.1 billion. It's also highly liquid with a daily trading volume approaching 2 million shares.

SLV's only real problem at the moment is that it uses JPMorgan Chase & Co. (NYSE: JPM) as its London custodian. Its share price plunged more than 50 cents at the opening last Friday on the news of JPM's $2.3 billion "hedging" loss. However, it recovered the entire loss later in the day and closed at its normal level relative to silver's price.

As such, you might want to consider one of the other silver ETFs, such as the ETFS Silver Trust (NYSEArca: SIVR), recent price $28.67 - or, if you're really bullish, the ProShares Ultra Silver ETF (NYSEArca: AGQ), recent price $43.08, which seeks to provide returns double those of silver itself.

Whichever method you choose, silver's recent pullback has provided a whole new opportunity to grab some profits from the next move higher, so don't miss your chance.

[Editor's Note: If you or anyone you know is thinking about silver, please read this. We've just released a report that exposes a massive scheme behind the price of silver.

What we found after six months of research will raise the hairs on the back of your neck.

It stems from a massive effort that appears to involve traders... investment banks... and, as some suggest, even the federal government itself. Right now, these factors are converging to push silver to a historic high.

Please go here to access this free report.

And, if you know of anyone who has a strong interest in silver, please forward this to them. They'll want to know the details.]

Source :http://moneymorning.com/2012/05/15/special-report-how-to-buy-silver-3/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 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

Biggest Debt Bomb in History