Good as gold. That and many other sayings attest to the power of gold. With a hold on the imagination as well as the financial stability of entire countries, gold has a special place in the world of metals. But that luster may be wearing thin. In today’s markets, gold prices continue to fluctuate, while the lowly silver and other industrial metals surge upward.
Gold prices rose in August 2013 to over $1400 an ounce, up $200 from the previous quarter. But uncertainty about the future of gold still persists. On the other hand,silver, which trades at rates far less than gold does, surged in price by 29 percent
in the same time frame. Compared to gold, silver isn’t worth much. Even with the current upswing in silver prices, it’s trading at around $60 an ounce. But unlike gold, which has a relatively limited application outside its investing value, silver is in wide demand in the retail and industrial sectors.
According to a recent report from the finance site Money Morning, the demand for silver coins is one reason for the upsurge in silver prices. For example, the US Mint revealed that at this point in 2013 demand for the American Eagle silver dollar has already outstripped totals for the whole of 2012.
Foreign interest in silver is also driving demand, especially in India and China. The Indian government raised the tariffs on imports of gold, but not silver, so imports of silver in 2013 have already doubled last year’s total. In China, too, interest in silver is growing, boosted by the country’s boom in industrial development. China is now the world’s second largest silver consumer, and Chinese investors are also pushing the demand.
The other white metals are also making gains, mainly in industrial applications. Platinum and palladium, used worldwide in a variety of heavy industries well as more glamorous ones like jewelry making, rose in price along with an upswing in other economic indicators such as job growth and industrial output. And even the lowly aluminum and tin, which remain staples of the industrial metals market, continue to trade at relatively steady rates.
The behavior of he precious metals market may seem far removed from real estate. But the movement of the metals reflects the health of other economic factors worth watching for income property investors following Jason Hartman”s guidelines. And for now, all that glitters may actually be – silver.
Daltorio, Tony. “Investing in Silver: Why the White Metal Will Continue to Outperform.” Money Morning. MomeyMorning.com. 5 Sept 2013.
The American Monetary Association Team