Buying or Selling Gold and Silver?

Many investors consider the recent drop in gold, silver and platinum prices to be the perfect opportunity to build (or add to) their precious metals position. With the price down, the basic law of supply and demand has kicked in and demand for silver bullion and silver coins has risen sharply. Short-term, supply has gotten tight, as some dealers scramble to keep up with demand.

We  also saw a major disconnect between Physical Gold vs. Paper Gold as a massive sell order hit the futures market to sell 400 tons of gold! But at the same time small buyers rushed to their local dealer to take advantage of the price drop and stock up on the physical metal. And of course since gold and silver prices tend to move together we saw similar action in the silver market as well.

Gold and SilverIn another article Jeff Clark, Senior Precious Metals Analyst for Casey Research told us that they talked with the wholesalers directly. These are the big boys, the bullion banks, bullion traders, and refiners. They deal in wholesale trades only, in large quantities. These boys supply the dealers and investment funds.

Here’s a summary of what Jeff found out about what occurred during the week after April’s 9.3% selloff in gold… [Read more...]

Investing In Silver

Investing In Silver can be extremely profitable when the common man decides he wants to invest in precious metals and thinks he can’t afford gold. If a major spike in investment demand if it were to occur there wouldn’t be enough silver to meet demand and prices would skyrocket. In today’s post Jeff Clark looks at the case for investing in silver. ~Tim McMahon, editor.

Hi Ho Silver: Making the Case for This Precious Metal

By Jeff Clark, Senior Precious Metals Analyst

Even though the newsletter I write for Casey Research is focused primarily on gold, our metals investments cover all the precious metals, and when warranted, some base-metals plays too. And with the markets in the state they are, I want to say something about silver.

Investing in silverMy talk at the Vancouver Resource Investment Conference in January was titled Is D-Day for Silver Approaching?, and highlighted the delicate balance between supply and demand. I concluded that there would be insufficient metal to meet a major spike in investment demand if it were to occur, leading to all kinds of negative consequences for those who don’t own silver (and lots of wonderful rewards for those who do).

I had plenty of compelling charts and convincing data. But here’s the rub: I don’t believe that what’s ahead for the price of silver (and gold) will have anything to do with that data. After all, there are articles from researchers and analysts that use similar data to paint a bearish outlook for the metal.

Instead, my reasoning is based on psychology. Here’s a good example… [Read more...]

Gasoline 20 Cents a Gallon?

Many of us aren’t old enough to remember Gasoline at 20 cents a gallon. I can remember gas during the 1960′s at 29.9 cents a gallon. The last time that gasoline averaged 20 cents a gallon was in 1942. That was during WWII ! But if you know us here at InflationData.com you probably know that we usually talk in inflation adjusted prices. So adjusting for inflation, the price of gas in 1942 would have been $2.78 if you are paying in January 2012 dollars. But that is still a long way away from the average price of Gas in 2011 of $3.48.

We track the inflation adjusted price of gasoline based on the annual average price using the Consumer Price Index (CPI) generated by the U.S. Bureau of Labor Statistics and a chart is always available from the menu bar above under Inflation Charts and Data / Inflation Adjusted Prices.

But this article isn’t about inflation adjusted prices using some artificially created index, and it isn’t about prices of gasoline during WWII.  How would you like to buy a gallon of gasoline for 20 cents today?  Yes, two thin dimes!  Well, I recently I read an interesting article called Why Gas Prices Are actually Falling and in it was this picture:

Gas 20 cents

 

So there you have it a store that is currently selling Gasoline for 20 cents a gallon. And if you look at it closely you will find that he is actually making “excessive” profits as the monetarists might say. You see, today as I write this, Silver is trading for about $35.51 per ounce. A silver dime contains 0.0724 ounces of silver. So at current prices a Silver Dime is worth $35.51 x 0.0724 or about $2.57 so the guy who is selling gas for two silver dimes is actually getting $5.14 per gallon of gas!

So that leads to one of two conclusions [Read more...]

Wanna Beat Inflation?

In a recent article entitled Is Gold really a good Inflation Hedge? I showed the history of Gold and how it really was a fear hedge rather than an inflation hedge.

Interestingly, I just read an article entitled “Wanna Beat inflation? Forget Commodities!” by newsletter author Dan Ferris.

It seems almost like heresy  to hear that statement from Dan since he writes commodity and oil-based newsletters. But some of the statistics he presented were very interesting so I thought I would pass them along to you. [Read more...]

The 2010 Silver Buying Guide

By Jeff Clark, Senior Editor, Casey’s Gold & Resource Report

Silver has been sizzling and causing lots of buzz in the industry. Investors are excited.

Part of the hubbub is due to its current run. Since its February 8 low, silver has roared ahead 22.4% (through June 21) and has doubled from its November 2008 low.

This excitement has spilled over into greater investment demand – especially so for coins. The U.S. Mint sold more Silver Eagles in the first quarter of this year – just over nine million – than any prior quarter in its history. The Royal Canadian Mint produced 9.7 million silver maple leafs in 2009, also a record.

Take a look at the jump in U.S. Mint coin sales since 2007.  [Read more...]