Silver: the forgotten metal?

| March 25, 2014 | 0 Comments
GoldMoney breakfast seminar

Private investors and intermediaries turned out for a GoldMoney breakfast seminar to hear about silver and why it’s the precious metal’s time to shine.

Hosted by Martyn White, GoldMoney’s Head of European Business Development, the seminar explained more about silver’s role in the preservation of wealth and why it should be considered for inclusion in a diversified portfolio.

Despite the title of the seminar Martyn said: ‘Silver is not forgotten, it’s very much in the minds of those in industry and investors. Recently we had a week in which our customers bought more silver than they did gold, highlighting its appeal and often over-looked advantages.

‘Although silver is more volatile in terms of price, if you had bought back in 2001, you would be seeing a 14.5% average annual return against the major currencies. In 2010 alone it increased by 93% which is why it’s also attractive to traders who look to take advantage of that volatility in price.

‘We are seeing some issues over future supply, 70% of silver is produced as a secondary product of zinc and lead mining, and there are very few new mines being identified. We are also seeing a reduction in the amount being gleaned from scrap recycling, and as silver is an industrial metal used in mobile phones and consumer goods etc, with an economic recovery demand is set to rise. We know of a large car manufacturer which is storing thousands of tonnes of silver in a Swiss vault for that reason.’

The seminar also looked at the gold/silver ratio, which is how much silver it takes to buy an ounce of gold. At present that stands at around 65.1, whereas the average for the past three years has been 55.1, indicating that silver is currently undervalued in relation to gold.

Finally guests learnt how important it is to buy from a reputable dealer, and to buy investment grade physical metal rather than silver through an Exchange Traded Fund (“ETF”) which has a greater counterparty risk as many ETFs don’t hold the metal. Those serious about investing should buy fully allocated bullion stored in private vaults.

The seminar took place at the Pomme d’Or. The next GoldMoney seminar is in May and focuses on Platinum & Palladium. For further information contact: hayley.dewar@goldmoney.com

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