Category: Silver

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How To Invest in Gold, Silver and Platinum

Now that Gold and Silver are rising, there have been questions about how us commoners can get in on the action. This is not an exhaustive list, but represents a few of my ideas (disclaimer : I may be invested in some of these) :-

BullionVault

I consider this to be a very well-respected organisation for investing in precious metals. Their exchange is transparent and they promise all metals are held in their vaults across the world.

For the inexperienced investor be careful when you buy, as illiquid exchanges outside of market opening times can have very large spreads and you get caught out.

To make it worthwhile, you must balance the % cost of the minimum monthly fee against your overall intended purchase and holding. It simply doesn’t pay off to maintain a small holding here.

An advantage here (given the forced confiscation of gold by governments that often occurs in a supposed crisis : think USA 1933, or even UK 1940) is that you can hold your gold and silver outside your home country. Switzerland, UK and Singapore being the most popular options.

Revolut

This online-only Lithuanian Bank, with full EU banking insurance, operates online only or via a very nice app that gives you access to Gold, Silver and Platinum exchanges with a very low bid-offer spread and a 2% commission on the free account version, reducing if you subscribe to a higher-level account. Bonuses here include that you can also set limit orders, so you can buy at a price you like. Downside is that when I read the T&Cs, it says “your precious metals are backed by a bank” – I have no idea which one, as it doesn’t say. No matter, I hope that as Revolut is an EU-approved bank we have some kind of banking insurance in play if it all goes wrong. at the very least we are on the same footing as if we bought one of the mainstream ETFs, where there are suspicions the metal isn’t as physical as we perhaps hoped.

As a bonus, even the free version of Revolut allows one free share investment a month, so consider investing in a gold, silver or commodities ETF (claimed physical holding, or mining) and remember that nothing I say here constitutes financial advice, I am merely echoing my own sentiments on cost-effective investing and my own sound investing ideas.

Revolut could also be a benefit to you in other ways – you get a free bank card for very cost-effective purchases abroad in foreign currencies and also, a “disposable credit card”, where the app will generate a one-off credit card number for online purchases, so no-one can hack and reuse your card. I personally find it ideal for travelling abroad.

Note however, that Revolut in the UK does not have a banking license, however it is still very popular there.

Your local coin dealer

In this world of virtuality, there could still be some benefit in keeping some coins or other such treasures close to hand in case of the ultimate crisis striking, where the money dies, as it did in 1923 for Germans, or the Machine Stops, as the internet easily could at some point. In fact, the WEF has luckily already warned us about such an occurrence, just as they did in 2019 with their pandemic preparedness.

In this case, it might also be worth picking up some silver coins.

Saxobank

Saxoinvest just started up a very nice-looking monthly savings account, where you autobuy shares in ETFs or funds based on the monthly amount in DKK you fund the account with. I note that the ishares Gold Producers ETF is on their free buy list, so could also be an option to consider as there is no buy commission.

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Jim Rogers Talks about Silver

After so much success with his gold views, I asked ChatGPT what Jim’s views on silver are and am very grateful to their information for us average investors…

Investing in silver, through the lens of an astute investor like Jim Rogers, is akin to navigating the uncharted waters of an economic adventure—fraught with volatility yet laden with opportunities for the discerning investor.

Silver as an Industrial and Precious Metal

“Silver is a hybrid, straddling the worlds of industry and investment,” Rogers might muse. He acknowledges silver’s dual role as both a precious metal and an industrial commodity, recognizing its diverse applications across various sectors, from electronics to solar panels. This industrial demand often shapes his views on its long-term value.

Supply and Demand Dynamics

Rogers keenly observes the supply-demand dynamics in the silver market. He might emphasize the growing demand for silver in emerging technologies, juxtaposed with the challenges in its production and supply. “Silver is a metal in the shadows of its golden sibling, yet indispensable in the modern world,” he’d likely comment, highlighting the potential scarcity in the face of rising demand.

Silver vs. Gold: A Comparative Perspective

Drawing parallels between silver and gold, Rogers might emphasize the volatility and potential upside of silver compared to its more illustrious counterpart. He acknowledges that silver tends to amplify the moves of gold, often outperforming it in bull markets but also bearing the brunt of downturns. “Silver is the wild cousin of gold,” he’d quip, alluding to its penchant for higher volatility.

The Role of Macro Trends

Rogers’ investment philosophy revolves around macroeconomic trends, and silver fits into this narrative. He might delve into the correlation between silver and broader economic trends, pointing out its sensitivity to inflation, currency devaluation, and geopolitical tensions. “Silver dances to the beat of macro rhythms,” he’d likely comment, underlining its responsiveness to global economic shifts.

Physical Silver vs. Silver Equities

Similar to his views on gold, Rogers might lean toward physical silver over investing in silver mining companies. He might express concerns about the operational risks, management decisions, and geopolitical uncertainties that mining companies face. “In silver, owning the metal is holding the ace,” he’d opine, emphasizing the tangible value of physical ownership.

A Long-Term Perspective

Jim Rogers’ investment horizon spans generations, and his views on silver echo this patience. He might advocate for holding silver as a long-term hedge against currency debasement and inflation, reiterating its role as a store of value through tumultuous economic cycles.

In essence, Jim Rogers’ take on silver investing reflects a nuanced understanding of its industrial significance, market volatility, and its potential as a hedge in a diversified investment portfolio. To him, silver isn’t just a metal; it’s a multifaceted asset poised to shine amid the complexities of global markets.

Jim is most reknowned for his 1970s Quantum fund management with George Soros and more lately, his move to Singapore. He seems to have a knack for knowing when to buy low and sell high and freely shares his insights via interviews and Books.

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The Glittering Prospects of Investing in Gold and Silver Mining ETFs

In a world where financial markets sway like a pendulum, investors perennially seek sturdy and reliable assets to safeguard their wealth. Among the constellation of investment options, gold and silver have stood the test of time, revered for their intrinsic value and as a hedge against market volatility. While purchasing physical bullion has been a traditional avenue, an increasingly popular and diversified approach is investing in Gold and Silver Mining Exchange-Traded Funds (ETFs).

Understanding Gold and Silver Mining ETFs

Gold and Silver Mining ETFs encapsulate a basket of companies involved in the exploration, extraction, and production of these precious metals. Investors gain exposure to multiple mining companies through a single investment vehicle, benefiting from the collective performance of the underlying companies within the ETF.

Advantages of Investing in Gold and Silver Mining ETFs

1. Diversification: These ETFs offer exposure to a diversified portfolio of mining companies, mitigating individual company risk. Fluctuations in any one company’s performance have a diluted impact on the overall investment.

2. Liquidity and Accessibility: Buying and selling ETF shares is relatively easy, offering liquidity compared to investing directly in individual mining companies. Investors can trade ETF shares on major exchanges during market hours.

3. Cost-Efficiency: Gold and Silver Mining ETFs generally have lower expenses compared to actively managed funds. They offer a cost-effective way to gain exposure to the precious metals sector.

4. Risk Mitigation: While individual mining companies can face operational, geopolitical, or financial risks, a diversified ETF spreads risk across multiple companies, potentially reducing the impact of adverse events on the investment.

Disadvantages to Consider

1. Volatility: Precious metal prices, and consequently mining ETFs, can be highly volatile. Fluctuations in commodity prices, global economic conditions, and currency movements can impact the fund’s performance.

2. Company-Specific Risks: Despite diversification, if a significant holding within the ETF faces operational issues or regulatory hurdles, it can affect the overall fund performance.

3. Tracking Error: Some ETFs might not perfectly track the performance of the underlying assets due to factors like fees, expenses, and the fund’s methodology.

Safety Aspects of Holding Shares in an ETF

The safety of holding shares in a Gold and Silver Mining ETF is contingent on various factors:

1. Regulatory Oversight: ETFs are regulated investment products, subject to oversight by financial authorities, ensuring a level of investor protection.

2. Asset Custody: ETFs typically employ reputable custodians to safeguard the underlying assets, reducing the risk of mismanagement or fraud.

3. Transparency: Most ETFs regularly disclose their holdings, allowing investors to monitor the composition of the fund and the performance of underlying assets.

4. Market Liquidity: The ability to easily buy and sell ETF shares on the open market provides a level of liquidity, allowing investors to exit positions without significant price impact.

In Conclusion

Investing in Gold and Silver Mining ETFs can offer an avenue for exposure to precious metals without the complexities of owning physical bullion or individual mining stocks. However, like any investment, it’s essential to weigh the advantages against the potential risks and consider personal investment goals and risk tolerance before diving in. While these ETFs can provide diversification and potential for returns, investors should conduct thorough research and consider consulting a financial advisor to make informed investment decisions in line with their financial objectives.

Remember, the glitter of gold and silver in the investment world often comes with its share of fluctuations, and a balanced, well-researched approach can help navigate the highs and lows of this intriguing market.

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Precious Metals Surge: Unveiling the Dynamics Behind Silver and Gold Rally, and the Impending Rise of Platinum

Introduction:

In recent times, the world has witnessed a remarkable surge in the prices of precious metals, particularly silver and gold. Investors and enthusiasts alike have been closely monitoring the factors contributing to this rally. As we explore the reasons behind the ascent of silver and gold, we will also delve into the potential for platinum to follow suit, given the unique dynamics surrounding its production.

The Silver Lining:

Silver, often referred to as “the poor man’s gold,” has experienced a surge in demand for several reasons. One primary factor is its dual role as both a precious metal and an industrial commodity. The increasing demand for silver in the electronics and solar industries has created a substantial market for this versatile metal. Additionally, the low interest rate environment and inflation concerns have propelled investors to seek refuge in tangible assets like silver.

Gold Glitters Amidst Economic Uncertainty:

Similarly, gold has maintained its status as a safe-haven asset, drawing investors seeking stability during times of economic uncertainty. The ongoing global challenges, including the COVID-19 pandemic and geopolitical tensions, have fueled the demand for gold as a store of value. Central banks’ continued monetary stimulus measures and the fear of inflation have further intensified gold’s appeal, driving its price to new heights.

Platinum’s Turn in the Spotlight:

Now, attention is shifting towards platinum as a potential beneficiary of the current market dynamics. Platinum is a crucial metal, widely used in the automotive industry, particularly in catalytic converters. The majority of the world’s platinum supply (over 70%) comes from South Africa and Russia. However, recent developments in South Africa, a major platinum producer, raise concerns about the metal’s future availability.

Power Struggles in South Africa:

South Africa, a key player in the global platinum market, faces challenges in its power supply infrastructure. The country’s electricity grid has been plagued by issues such as load shedding and an aging power infrastructure. Unreliable power supply not only disrupts mining operations but also affects the overall economic activity, potentially impacting platinum production.

Russia’s Role in Platinum Supply:

On the other hand, Russia, another significant contributor to the global platinum supply (around 10%), has maintained a relatively stable production environment. However, geopolitical uncertainties and international relations may impact future supplies. Investors are closely monitoring these geopolitical factors as they consider the potential impact on platinum prices.

Investor Outlook and Conclusion:

As silver and gold continue to shine amid economic uncertainties, platinum emerges as a compelling investment opportunity. The metal’s unique industrial applications, coupled with concerns over the reliability of power supply in South Africa, suggest a potential uptrend in platinum prices.

Investors are advised to stay vigilant and consider diversifying their portfolios to include precious metals like platinum. The evolving dynamics in South Africa and Russia, combined with the global economic landscape, could position platinum as the next metal to garner significant attention in the ever-changing world of commodities.

Handily enough, Bullionvault* also allows investment in Platinum. As does Revolut*.

Both businesses will remit a small portion of their fees to us, but this doesn’t affect the price for you and we do genuinely recommend them for good service and access to corners of the market often off-limits to smaller investors like us.

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Silver Squeeze

A lot has been made of recent events involving a US company, Gamestop and how their meteoric share price rise was a battle between David and Goliath, Goliath in this case being big hedge funds who short sold Gamestop in the expectation of large profits on the share price continuing to fall. David on the other hand, an army of small investors / speculators, buying Gamestop to stop the price falling and force the short sellers to buy stock at ever-increasing prices.

I don’t agree.

For sure, the way the share price yo-yoed around will mean a lot of people will have made a lot of money, just as another lot of people will have lost a lot of money and a lot more people will be somewhere in-between, with small losses and small profits. Who those people are, I don’t claim to know.

Initially, I was sucked in by the story too, until I took a step back to think about why it was getting so much publicity and being presented like this in the first place. as someone once said, “the revolution won’t be televised” and so it is here. If the small investor really was getting one over on the big guys, we probably wouldn’t even get to hear about it and rules would be quietly changed to stop it happening again.

Apparently WallStreetBets, the Reddit group supposedly behind all this, has several million members and it’d be hard not to believe at least some of those made a lot of money pumping and dumping a business whose days are probably numbered, physical shop locations in dying malls and city centres, selling games in boxes at a time that it’s all migrating to online, even the downloading of the products themselves.

What has this all got to do with Silver anyway?

Well, some posters claimed Silver was going to be the next target, with an attempt to attack JP Morgan, who short silver way in excess of the physical silver market, to suppress the price. Again, I have no doubt machinations take place to make the price whatever it needs to be at a given time, but I wouldn’t recommend that you try to actively participate on this base and furthermore, I wouldn’t recommend that you imagine yourself to be one of Robin Hood’s merry men, ambushing the bad guys and taking the loot to redistribute to your favoured needy causes. The game is often rigged, probably more so than any of us realises, but just occasionally, the riggers get found out. I just don’t believe this is one of those times. Admittedly, JP Morgan did have to pay a large settlement for active involvement in the silver market, but whether anyone has the resources to take the big boys on is another question.

Meanwhile, I can’t help but feel that this story will be used to bring in some laws, under the guise of investor protections. Perhaps that was the real intention of it all along.

If you invest in silver or gold, it’s a long term story, where some day people will realise prices of essential goods and services are rising dramatically in their local fiat currency and begin to wonder why. We aren’t there yet, but if precious metals start to rise priced in that same fiat currency, I believe that will be the major reason, that the game is up and it’s every man and woman for themselves. Much likelier than feeling yourself aligned to an online group of renegades who you’ve never met and who you don’t know the true motives for wanting you to get involved and spend your money on their cause, isn’t it?

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BullionVault

Founded by Paul Tustain, BullionVault sits somewhere between Goldmoney, for safety and Gold storage, and more traditional trading services.  Bullionvault is UK-based, although an additionally interesting feature is the ability to store your gold in their New York, London or Zurich gold vaults.  Dependent on which country you are a citizen of, you will probably feel most comfortable placing your gold outside of that country so that is not subject to your local government jurisdiction, so top marks for considering that feature.

An interesting aspect of the three separate vaults is that these could be considered as separate currencies in their own right.  For example, if at some point in the future there was a repeat of the 1930s US Gold confiscation, gold stored in a New York Vault might become priced significantly lower than gold stored in a Zurich vault, as US holders try to sell and place their gold outside their own jurisdiction.

BullionVault allows you to buy and sell Gold on their impressive looking trading platform, where buyers and sellers of gold from each vault can meet and state their required selling/buying prices, so if you are more inclined to hold gold, occasionally sell on a dip, then buy in again later, then this could well be the best service for you.

Their fees for transactions and monthly storage are really low too, so they are very worthy of investigation.  The storage fee is currently $4 per month fixed, regardless of holding size, and only payable for the months in which you held Gold.

Again, Bullionvault has proved popular with Gold Bugs accumulating gold for the future financial crisis they believe is in the offing.

Payment into BullionVault is by bank transfer.  Payment out is by bank wire transfer to your chosen bank account.

In recent years, they introduced a silver option.  That they took so long may have been something to do with BullionVault being UK-based and the UK charging VAT on silver sales, which could, to many observers, seem to be another example of government getting in the way of free trade.

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GoldMoney

This was the brainchild of highly-respected gold watcher James Turk.  Goldmoney was structured with a cast iron guarantee that there will always be 100% gold backing of every unit of currency (called “goldgrams” in this case) in circulation, and they claim that some others do not have the same cast-iron guarantees in their small print.  Whether this is true or not is hard to say, as for an ordinary investor the small-print is difficult to understand, but the discussions and articles available make interesting reading when deciding on the safety of providers you are considering.

Goldmoney, like e-Gold did, also tries to offer the use of Goldmoney as a medium of payment.  This however is not very heavily used right now, and the majority of investors are gold bugs simply buying gold and silver and holding it.

What could appeal to British or EU citizens about Goldmoney is that it is Jersey-based.  You may trust and understand the rules of Jersey more than those of the Caribbean or Panama.  This is not to say that other organisations are unsafe.  A US-citizen may just as easily understand Panama and believe it to be much safer than Jersey.

As time went by, Goldmoney has opened a variety of vaults to cater for the requirements of international buyers, including London, New York, Zurich, Singapore and Hong Kong.

GoldMoney also has a Silver option, and this represents an excellent opportunity for European Union buyers to buy Silver bullion without legally paying any VAT.  More latterly they also introduced the ability to hold the national currencies of Dollars, Pounds or Euros in your Goldmoney account and receive interest on it.  You can then switch your holding between any of the five denominations (including the two metals), as you see fit.

Knowing that it’s the fees that make investors poor and brokers rich, you are probably best off not utilising this feature.  The fees will quickly eat into your returns, and a buy-and-hold strategy is probably best.

Payment into GoldMoney is by bank transfer.  Payment out can be made by direct bank transfer.

One other aspect of GoldMoney worthy of mention is that at one point the terms and conditions said that if your account is not logged into for 12 years the ownership of your gold reverted to Goldmoney.  Okay,  it sounds unlikely, but consider what would happen if you died and never told anybody about your holding or even if you were unable to use the internet for 12 years due to some kind of accident or national crisis.

Overall, a highly respected organisation with the reputation of a known “gold-watcher” behind it.  Even if you don’t buy Goldmoney then there are articles available for free on the website that make interesting reading.

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Introduction to Gold and Silver

Gold has at all times been considered the best of testimonies of good faith

Rafael Sabatini

People have always wanted and needed to transact with each other.  In the beginning, it was barter.  The concept of “I’ll swap you these fish for some firewood”, or such like.  While it worked, it was clearly very restrictive and relied on two people needing a direct exchange.  What was really needed was a trusted store of value that could be used as payment for goods and services, over and above direct barter.  It started with sea-shells and stones that were used as currency, things that could be recognised and counted to account for transactions, moved to commodities like salt and then ultimately to Gold and Silver.  The English language even has some surviving remnants of this history with ‘shell out’, as a slang term to pay for something and ‘salary’ as monthly payment for work, originating from salt.

Gold (and silver) ultimately became the real units of currency upon which world trade is based.  Historically they have replaced all other forms of currency in civilisation because they are durable and not easy to replicate, so future value is relatively assured.  Gold is naturally scarce, so perfect as representing value – that ancient alchemy was about trying to turn lead into gold is no coincidence and the entire gold of the world would fit into a tennis court-sized cube.  Gold especially has a reputation for not tarnishing or rusting, and is even resistant to some strong acids, meaning that as far as a medium of exchange goes there is nothing, quite literally, “as good as gold”.  It’s also infinitely divisible in weight as a currency unit and an ounce of pure gold in the African desert is identical and therefore worth exactly the same as an ounce of pure gold in London, making it perfect for international trade.

Gold is, essentially, the perfect item for stored savings and to be used as a medium of exchange with another party as and when required.  You can take a gold coin as payment, bury it in the garden for 2,000 years and it will remain as shiny, perfect and representative of it’s true value as ever.  The 2,000 years may seem extreme, yet hoards of this age of gold coins turn up surprisingly often and are worth an awful lot of money.  Compare this to if the coins were made of a cheaper metal, they’d rust and corrode, often disappearing completely.

It started with exchanging pieces of gold and silver, but that was impractical so people learnt to melt them down into regular sizes, or weights, then into rounded discs called coins, or ‘specie’.  Paper money only came into being in the first place as a substitute for the practice of using physical gold and silver in transactions and the trouble of getting your shovel out to bury it then dig it up, perhaps.  What happened was that people deposited their gold with a bank, and then the bank would issue them with a promissory note, or notes for the value of their gold.  People could then use their notes to buy goods and the person receiving the note knew they now owned the amount of precious metal stated on the note. 

The real problems started occurring when people – normally banks, governments and forgers, began issuing extra currency backed by the same amount of precious metal, and, in 1971, the last historic link between gold and worldwide currency was removed by the USA, when they removed the link that 1 ounce of gold could be exchanged for 35 dollars and vice-versa.  Up to this time, gold had a fixed value in terms of world trade. 

To give you an example of how that paper you have in your wallet, or digital bits on your banking homepage screen have become distended from the real money it once represented, just think of this – A British Pound Sterling was once worth exactly what the words say – A pound in weight of Sterling silver.  As of the end of August, 2020, the same pound of sterling silver is valued at £282, or $376.  That is 0,0035% of its original value. 

It is also worth noting here that Gold is a purer representative of true wealth than silver.  Although both metals have been heavily used throughout history as currency and to represent wealth, Gold has few uses apart from as money, whereas Silver is a heavily used industrial commodity and that can affect its price and desirability outside of any investment considerations.  For example, back in 2007, some commentators were convinced that the rise of digital photography and the resultant downturn in traditional photography would result in a massive decrease in demand for silver, affecting the price negatively as a result.  This may or may not have occurred, as silver did experience some major shifts in price versus fiat currency in the period 2007-2020.  However, silver has many, many other uses, including electrical components and such uses are only increasing as technology increases.

To put the importance of gold in perspective, imagine you time-travelled back to 1910, almost anywhere in the world.  The people were transacting with gold and silver and there was even something called a ‘Gold Standard’, for international trade.  In practice, this meant that gold physically moved between countries according to the balance of trade between those countries.  If you had a deficit, you lost gold, if you had a surplus you gained gold.  In other words, a nation state was just a larger version of how we all run our own household finances.  Now, imagine that as part of your time-travelling visit,  you tried to pay for something.  Having first noted that there was no card terminal for you to tap or even enter your PIN on, no mobile payments, you tried using the modern equivalents of some of the coins in circulation.  People may have looked at your legal tender dubiously, noting they were made of steel, nickel or paper and therefore not worth anything like the coins they were used to – the silver shillings or dollars, the gold sovereigns, all with real intrinsic value.  Who was more financially aware, them or us?