Jul 092012

I like to invest in precious metals, both on the stock side, as well as in bullion. Lately I’ve noticed the price of silver has been under-performing relative to gold.  The price of gold today (about $1600/oz) is pretty much the same as it was 12 months ago.  But silver on the other hand went from $37/oz a year ago to $27/oz today. That’s a pretty big drop (O_o) Since I know that the value of either ore (^_^) can’t decrease indefinitely, I think now would be a good time to increase my silver exposure.

So a few days ago I picked up 3 silver coins at the local bullion exchange (VBCE) in downtown Vancouver. They weigh 1 ounce each. These beauties can be purchased by anyone. Just contact your local bullion dealership. You can also buy them from an online broker these days, or ask me for further details. If you don’t care for the maple leaf design you can also purchase regular silver bullion for practically the spot price of the metal. For readers south of the border, you can buy the American Silver Eagles instead.

It can be argued that precious metals (gold, silver, palladium, etc) aren’t real investments because they don’t generate any returns, and the price of these metals are largely based on speculation. But the reason I like to own physical silver is because it’s really shiny and fun to hold and look at. Plus it’s a hedge against inflation. And I personally believe there is a fundamental element of supply/demand that affects it’s price because silver is an essential component in the making of cell phones, cameras, mirrors, cars, solar panels, computers, laptops, TVs, and a bunch of other necessities for the modern society.

image credit: dailyreckoning.com

Bullion: A piece of high quality, relatively pure, gold or silver coin, bar, or sometimes ingot.
Spot Price: The current market price of a commodity if the trade was done immediately.
Palladium: A rare, metal element (Pd) with similar properties as platinum. It is mostly used in catalytic converters.
Random Useless Fact: In 2007 the government made a huge gold coin that weighs 100 kilograms (220lb). Back then 100 kg, or 3215 oz of gold was worth $2 million. Today it’s worth $5.1 million.