Tuesday, April 24, 2007

Silver Questions

I’m in a bit of a mood today totally unrelated to the drop off in metal prices. I’m wondering why are my hits are going up yet the comments are minimal.

That in mind I have some questions I would like answered.

Have you accepted the argument of metals as a sound investment or at least economic insurance?

Do you hold Gold or Silver or both?

If Silver, are you basing your investment on the belief in a probable eventual silver shortage or simply as real money and a hedge against the dollar?

What are your favourite products, why?

How are you dealing with storage?

How do your perceive the relative safety of paper silver/gold?

Do you dabble in metal equities or purely bullion?

What are your target prices, short and long term?

Off metals for a second, should we expect an inflationary or deflationary sprial to bring this mess to crisis?

I should really do this in a survey form but this will have to do. I hope to get some feedback about these issues, after all I know what I believe but I’d like to know what the bigger consensus is.

What if anything do you wish to see discussed on this site?

Kubera Jones
Lord of Wealth

Monday, April 23, 2007

Silver and stuff april 23

So we got beat up a bit at the end of last week but we still managed make back the vast majority of on Friday so I’m not too concerned, There was news of more French Central Bank gold sales so fact that the big dip was only 1 day long shows that there is real strength and enough demand in the market to suck up excess supply nearly as fast as it be added to the market.

Gold is down just under 2 dollars again today yet silver is up .13 and just off last weeks highs. I’m convinced that metal strength is real and will remain strong but it appears that flooding of the market to suppress the price could continue this year so I won’t get too cocky and mortgage the house just yet. Last week we saw the Japanese come out in support of IMF gold sales to cover operating losses (and no doubt bolster the U.S. dollar). How much will gold the IMF sell is anyone’s guess. I still think the bigger question is the relevance of the organization!

On the other side I’ve seen predictions that gold sales will follow last years trend and continue to drop. There are two reason for this I suspect, 1 the banks are running out of bullion to sell, 2 self interest- since bullion selling seems to be having less and less effect on gold or the dollar so it’s in their best interest to hold and capitalize on gold’s appreciation.

The financial breakdown in Zimbabwe has reached a new stage with the closing down of all major gold mines in the country. The Government has not been paying the miners for the bullion since January creating cash crunches for most operations. It’s also been reported that the government has failed to fulfill their agreements to make 67% of payments in foreign currency. The lack of cash flow, the constant devaluation of the currency from the 1700% inflation rate and a fixed price for gold in Zimbabwean dollars left miners finding it hard to produce gold at a profit. The final straw however was the lack of foreign currency which left the miners unable to purchase cyanide for leaching gold ore. While Zimbabwe is only a small piece of the supply picture no drop in supply can be ignored.

If I had any cash available I would still be comfortable buying at this point. Of coursem, what do I know;)