The basics behind the possession of gold and silver

Gold price technical analysis 30 - May, 2013

This article presents the principle of investment gold and silver for each individual. There are several factors and Jhtna to conclude that gold is one investment that can be retained for a period of ten or twenty year the next two, with the confidence that this investment will result in good performance. My timing and logical approach in the entry, and eventually out of the gold and silver as an investment Satrha in this article fully and in detail.

Headline is that the gold and silver are not in the bubble (until now), it remains much profit is available, fiscal policy and waves of supply and demand play their roles in Bagaan.


In 2001, and with painful end, the stock market is impelled in huge numbers of investors, finally arrived in this market to the case of absence of consciousness, and began to grow on my investment in traditional stock. Basttta my home for 23 years and the remaining 25 years of funding, these shares were all my investments. Therefore tended to dive into the economic information available to see what might be discovered. What I found amazed me! And will not be looking for this information here.

With the arrival in 2002, I had reached a sufficient stage of the audit and the search for fiscal policies, economic and political to conclude later that the maintenance of gold and silver is a good idea. Placed 50% of the Cache, which I own in precious metals and sat watching.Since then, cognitive, and my appreciation for the role played by gold as property and cash silver metal can not be Alastgta him in the industry, arrived Omag large in my mind.

Investment in gold and silver is still a good idea. You the reasons:

Why owning gold and silver??

Reasons for owning gold and silver, and I mean sensually tangible means and not certificates or shares, are the causes and clear and direct. Let me start with the reasons to own a primary gold:

1 – The protection of financial vulnerability
2 – insulation of stupid mistakes and financial policies in place
3 – a deposit of a possible collapse and the fall of the banking system / financial
4 – the option is available in gold and reverberate in the event of the liquidation and sale of gold

What I mean by financial weakness is to “create” money out of nothing and to pump more liquidity in excess of the economy need the product.We have the central banks in the world doing this for decades and before the financial crisis. When we speak of gold we see that gold production from the ground does not exceed 3% annually, while production of money was growing at an annual rate of three times the proportion of gold since 1980.

This photo is not fair, because the economy was growing well, but the growth of money and religion had GDP growth of the States great strides. As the economy continues to suffer under the burden of this huge debt and with the continued working system of religion, as if the expansion of the economy is something possible to happen, look at the impact of all these dollars and its impacts on the prices of products and services.

Negative real interest rates (the rate of inflation means higher revenue from treasury bonds). And this is because central banks to buy bonds from the money made from the air! Historically been associated with negative interest rates on a permanent basis and with high revenues for goods, and especially precious metals. If and when the real interest rate turned to positive numbers, we will re-mind about investing in gold and silver, but until it happens.

Fiscal policies across the world are still the same. Even the proportion of the 1% that Greenspan issued in 2003 were not negative (real terms) than Bernanke’s Financial Engineering. But this is the option available to the banks of the twitch Avlassadtha suction and Treasury debt. Seems to be no end to the facilitation of these programs until they become a permanent feature of the economy and global financial system. In Europe, of course, this is equivalent to the existing sovereign debt in the budget of the European Central Bank.

The federal deficit out of control and is stuck in over the $ 1.5 trillion.Spending huge sacral always lead to inflation, and inflation usually is a friend of gold and silver. Although this equation is not always correct, is not a strong relationship between inflation and inflation in the case of metal center (less than 5% inflation). For example, when the gold price fell from its peak in 1980 to the Hall in 1998.18 years of inflation, the center length of this period. Sooner or later I expect a deficit of more than imagination and budgets will translate inevitably to inflation exceeds the imagination as well.

The third reason: the collapse of the deposit of the banking system, is an important part of the logical to keep the gold. Here I do not mean “paper gold”, which includes financial products such as certificates of investment, and that you can buy such shares through the broker. I am talking about gold and silver because these Almmoosan Almadnyin you can keep them outside the banking system / financial property and perform the role of cash.

Literally everything else financial, and includes banknotes, religion is likewise another person, but not gold and silver. Property you are simply just do not and this is a very desirable feature and can not find in anything else.
If faced the collapse of the banking system regulations, which I think is the probability of obtaining a high ratio of 1 to 4 within the next 5 years, I expect the banks to close the period of time. If this is a period of two weeks or six months, it does not matter, I prefer to be with me instead of gold deposit in the bank.

During the holiday Abannoko will be frozen and your money just sitting there, Hto and if the prices of all products in the rise of a missile (and especially imported products). At a time when your money will be available to you, you will find that much of it has evaporated from the impact of the fall and the collapse of the purchasing power of his work.How to avoid this?????? Simple, let part of your money outside the bank for use during emergency situations. Personally, I always kept three months, cash money, but you have to have gold and silver as well.

The last reason behind owning gold is because gold can be liquefied, and this is a very good reason to me. Here are some numbers: the official quantity of gold or gold-owned central banks in the world is 30,684 tons or 987 million oz. In 2008, the amount of money invested in stocks in the world almost $ 60 trillion. If the world is supported by gold 100% of all the money is located, price of an ounce should be 60/987 = $ 60.790 an ounce. This is clearly a ridiculous price (is it ridiculous??), But even if we say that only 10% of the money must be backed with gold, it would deliver ounce gold price to 6000 $. The point here, my brothers not play the numbers and show my intelligence, but only to prove that if there is no destruction of a large financial derivatives of the global market in a way, or if they are not buying larger quantities of gold in a formal way by central banks, support and if partially with gold printing money will lead to a much higher price than the price of today’s $ 1500 an ounce.

The difference between gold and silver

People ask me if I had gold and silver and if they were one word. I own a Monday and Praise be to Allah. But for very different reasons. For me gold is a material cash. Gold have traits such as cash and was used as money in many diverse cultures throughout history. And I expect this to continue.
And there is a chance to grow each week to use gold as money because of a global system failure Alamlaty paper. If or when the failure of this system Alamlaty paper, there must be an alternative, and the only known alternative to stress is the gold standard. Therefore, selection of gold a serious chance to be the new system used during the difficult period ahead.

Industrial silver metal with possession of prescription nothingness replacement. Metal conductivity is very well known yet, so it is used widely in the electronics industry. And using layers found on Albering important in aircraft engines are also used silver additive to an antimicrobial for everything from wall paint to the canvas clothing.Almost all of these uses and thousands of other uses, the quantity used is very small so that it is impossible and the futility of re-manufactured or recycled and are not usually this session of the silver.

Because of this epithet of depreciation and depletion, quantity of silver above ground ubiquitous historically been few. When I used silver as money, the greater the amount of silver extracted from the earth on an annual basis. With the decline of industrial uses for this metal, reflected in the process, and today we see perhaps one billion ounces above ground while the quantity in 2008, about 4 billion ounces.

Bcesp this dynamic consumer, it is reasonable that we do not see very well New ounce of silver in the world of the stock within the next twenty years, while we will see some one billion ounces of gold have been added.

I own a gold metal Mali, and silver I have described because of financial, but more importantly because I think that the silver industrial demand will continue for a long time and will become a Silver Rare and few exist.

Supply and demand for gold

It is not surprising that the high prices of gold and silver may have stimulated exploration and mining output. With stable high prices for a decade, there was a lot of time to find a new production. Which brings us to a new and surprising is that in the case of gold was an increase in production are relatively few.

Says Foundation analytic S Chatrd that the percentage increase in gold production did not exceed 5% during the past five years, the last two. Report continues: Most of the analyzes in the market for gold focus on the movement of the U.S. dollar and inflation and deflation – we do more than this through our follow-up to produce Mines also as a major engine for the price of gold. In our study of 375 global mine and found that after ten years of market impelled, the gold mining sector has done nothing to increase production. We expect to increase 3.6% over the next five years. Standard Chartered

This report is not a surprise to anyone aware of any stage and we got in the cycle of consumption, but this report represents both an economic shock. The report adds that in order to justify the existing mining expenses must be at least average selling price per ounce of gold for $ 1400, while the demands of modern construction, mining at $ 2,000 per ounce!

These prices required to justify the expenses of production and investment are exactly the same dynamic that we see with each source is subject to depletion: high energy prices reduced earnings from raw materials. And costs of which I speak is not simply the price Alatrul Alkatrbelr DVD – 9, but the cost of ubiquitous energy in the iron industry and all the components of production to delivery.
As is the case in the oil companies that require an oil price increase of $ 10 for the current price per barrel until you reach the point of break even with the increase in energy prices and depletion at all times. This will prevent many new companies to enter into this field.

The broad heading of Standard Chartered Bank is that they see that the price of 50,004 ounces of gold is a realistic goal, and they add that the shift in the compilation of the most important gold over the past 30 years:

Comes the limited production of gold at a time when central banks shifted from sellers to buyers. The result, from our point of view is to reach the deficit in the gold market, with the assumption that growth in demand. And with the lack of convergence of supply and demand, we will see gold price per ounce in the direction of $ 5,000. Standard Chatrd

Supply and demand for silver

Growing demand for silver by binary digits, backed by the industrial use and investment demand. Silver Institute has done excellent work in research and Altgariran these things:
The first request:

Industrial demand grew in 2010 by 12.8% the amount of 878.8 million ounces. The previous year, increased industrial consumption of silver by 20.7% to 487.4 million ounces covering almost Ka losses in 2009.

Increased profits of silver jewelry by 5.1%, and is the first increase since 2003, supported by strong GDP for emerging markets and the industrialized world. Photography fell by 6.6 million ounces and is small loss of 9 years because of delayed medical centers in the conversion to digital systems. The demand for silver pots fell to 50.3 million ounces from 58.2 million ounces because of weak demand Indian.

And now the request:
Silver production in 2010

Increased production of silver from the mines by 2.5% to 735.9 million ounces in 2010 with the assistance of some projects in Mexico and Argentina.

Mexico to Peru, such as the State covered the most productive guy Aalamba of silver in 2010 and Peru, followed by China, Australia and Chile. World supply of silver record 5% increase to hit 30% of the total production from the mines in 2010.

And I say that we were comparing an increase in demand for double-digit increase in the single digits for display.

Will not be long before we see higher prices of silver to slow down demand. One of the reasons I was invited to invest in silver is my belief that the price was low and largely artificial, and for this would be a good investment.

Given to the basics above, I see that the price of precious metals would increase significantly and assessment of the current price of the dollar with the end of this decade.

  • kamil nadeem

    it gave me an interesting reading but with some peculiar words not understandable.

    Thanks for the article.
    A question
    Can we expect the gold price of appx 1500 USD per ounce for 24 carat in the near future.