Ed Note: This analyst offers 3 options of Investing into the developing Silver Bull Market. From the safest risk wise of investing in Silver Bullion through Silver Coins, the more risky ETF’s, which are often leveraged and of course rely on the skill of the Fund Manager to time their purchases of Silver Bullion well.
Then their is the more risky though potentially profitable strategy of buying individual Silver Mining companies. In this vein you can purchase existing producers that offer less risk than do Junior Mining companies. Though if a Junior Mining company is successful in moving a property from an exploration property thru to a producing company, offer the greatest potential for profit. Juniors are also simply the riskiest share investment you can make in the Silver Market. If you want to study a Junior Mining opportunity, I would recommend that you look at this incredibly detailed analysis of a Junior Mining opportunity that owns the Largest Land Package in One of World’s the Best Gold Mining Jurisdictions, the historic Rouyn-Noranda Mining Camp. Click HERE to view this thorough analysis of a Junior opportunity. Extremely detailed, right through to the resumes of each of the principals and key geologists involved in the project.
Silver is rallying sharply this month, up about 14% in the last three weeks and blowing out of its old range. After it closed yesterday at $21.85, I’m confident we’ll see silver test $27 or even $30 by the end of this year.
And that will make a huge difference for undervalued silver producers.
There are three reasons silver is going higher, and some ways you can make money as it rallies.
1. Mom and Pop Are Loading Up
Silver bullion coin sales rose to a record high in 2013. Here’s a yearly chart of U.S. Silver Eagle sales…
The U.S. Mint sold 42.675 million American Eagle silver bullion coins in 2013. That is 26% more than 2012, and it’s a new single-year record for the most purchased since the U.S. Mint began producing the one-ounce silver coin in 1986.
And it’s not just the U.S. Mint that sold a lot of silver coins. Mints in Australia, Austria and Canada have seen booms in silver coin sales of 41% or more.
And the buying continues. Sales of American Eagles are on pace for another record year.
2. Silver ETFs Are Buying, Too
Selling of gold by ETFs was a huge weight on gold prices last year. But silver didn’t see a rush of selling by ETFs. The amount of ounces they held stayed flat.
And now the ETFs are adding to their holdings.
Through February 14 of this year, the major silver-backed ETF products held 631 million ounces. That’s up 100.9% from their holdings at the end 2008.
3. Industrial Demand Is Set to Soar
Industrial demand accounts for more than half of total demand for silver. Smartphones, flat-panel TVs, solar panels, chemical reagents – they all use silver.
My sources say industrial demand for silver could rise 6% in 2014 to a record 511 million ounces. And that’s not including demand for jewelry and other uses.
No Surge in Supply
All this, and yet output from the world’s largest silver producer, Mexico, should remain nearly unchanged this year. China is the world’s No. 2 silver producer, and it’s the same story there. Worldwide, production is only expected to rise slightly in 2014.
In fact, most of the new silver that comes on line isn’t from primary silver producers. Instead, it is as a byproduct of mining for other metals. That puts a lid on production, no matter what the demand.
Individual miners offer a potentially very profitable way to play a rally in precious metals. But be careful; miners can be volatile. Click HERE to view this an extremely thorough analysis of a Junior mining Opportunity.
If you’re investing in silver on your own, you may be better off sticking to funds like the iShares Silver Trust (NYSE: SLV) and the Sprott Physical Silver Trust (NYSE: PSLV).
Good investing,
Sean
