Monday, October 03, 2011

Silver at $30, Am I buying?

It looks pretty obvious that after two crashes $30ish is the new floor for silver and as such it is an excellent time to buy. Unfortunately for Canadians our dollar has taken a shit kicking over the last couple weeks so today’s silver sale is a little less sweet than it should be. (With a lower price and a higher currency Americans should definitely be jumping back in with both feet.)

What I can’t understand is the flood of money from the Euro to the U.S. dollar. That’s really akin to changing your cruise booking from the Titanic to the Lusitania, either way you’ll end up taking a bath. Regardless of reality, the trend toward the U.S. dollar and weakening commodities will continue to hurt the Loonie until such time as something major and disastrous hits the U.S. market, BOA failing perhaps? All we can do for now is ride it out.

So in answer to an email that asked if I'm buying? Hell yes!

But what to buy?

At the beginning of my silver investing I was overly concerned about the premiums on small bars and ended up with two many large bars, mostly 100s added to the junk I had already collected. While logical in that I was getting the most for my money I believed and still believe that fiat currency is destined to be destroyed and that silver and gold would once again be circulated as real money, in that situation the big bars I have aren’t very practical. Face it, when silver goes up to $200 dollars an ounce it’s going to damn hard to break a 100 ounce bar at Tim Horton’s or barter at the farmers market with a Kilo of silver.

With this in mind I’ve been focusing my purchases on smaller and infinitely more practical 5 and 10 oz bars as well as many 1 oz rounds which were generally the smallest sized silver you could find. Recently however a wide range of smaller sized pieces have been coming to market including ½ ounce rounds, 5g, 10g, ¼ oz and ½ oz bars from NorthWest Territorial Mint, both in their own brand and for Pan-American Silver. At this time the premiums on these tiny bars are quite high making an ounce of silver in ¼ oz bar form just shy of $48 us, or the ½ bars $36.66/ounce vs a full ounce round at $34.33. For Canadians there is also the issue of cross boarding shipping combined with the possibility of wrongly assigned duty because people don’t know their jobs. Curious if anyone else had new products I also checked out first Majestic Silver who now have their own ½ round (also from NWT Mint) at $35/ounce. Available in a previously hard to find size, under a 5 dollar premium, in country and quite pretty too, This is what I’m buying!

Added Oct 11

Ok I have recieved my 1/2 oz rounds last week and they are nice enough that I've reordered the maximum 10 rolls, plus some more 1oz rounds. I wish First Majestic Silver had an associate plan of some sort, I'd proudly sell these.