Australian Bullion Company

On Tuesday, August 25, UBS predicted a further increase in the price of gold—despite a recent correction. Interestingly, UBS also predicted a rise in the price of silver. The Swiss-based bank believes silver could hit $50 per ounce in three months. Why? Investors are seeking safe haven in precious metals during the storm in equities and bond markets. Thus investors seem eager to buy gold and buy silver.

The rise in gold has attracted all the media attention. Silver is benefitting from the on gold’s ‘coattails’ and the overall rise in precious metals. Many investors who feel they have missed out on the rally in gold prices are buying silver: instead of taking a risk by shorting gold, they are looking to buy silver.

An Attractive Metal

Outside of jewellery, gold’s uses are few and far between. However, there’s a strong industrial demand for silver. The main reason: it conducts electricity. So technology companies buy silver. Industrial uses account for 40% of silver production. You’ll find silver in everything from plasma TVs to solar batteries and even water purification systems. Two countries that buy silver? India and China. Led by these two countries, total global industrial demand for silver will increase from 487 million ounces to 670 million ounces: an increase of 35%.

Were the Predictions Correct?

On April 12, 2011, Alex Steel of investment website The Street (www.TheStreet.com) canvassed several traders and asked them to predict the price of silver at the end of the year. Who is looking like they’re going to be correct?

Note: the price of silver on August 26, 2011 was $41.13/oz.

• The founder of Silver Investor, David Morgan, predicted silver at $45 an ounce.
• President of Tower Trading, Anthony Neglia, told The Street to expect $50.
• A senior strategist at Lind-Waldock, Phil Streible, predicted $42.
• Great Panther Silver CEO, Bob Archer, predicted $40.
• The CEO of First Majestic Silver, Keith Neumeyer, predicted $50 an ounce.
• Chairman of GFMS, Philip Klapwijk, also predicted $50 an ounce.

With four months left in 2011, the predictions are so far very close to being correct—albeit a little ahead of time. So is now a good time to buy silver?

Nobody can accurately predict the price of silver or any commodity. However, UBS, one of the largest and most prestigious banks in the world, predicted a significant increase. And many prominent silver traders and experts have so far been ‘in the ball park’ about the price of silver since their April predictions. So it’s certainly a good time for the serious investor to look to buy silver as part of their investment portfolio.

In the commodities markets, gold gets all the attention. And with all the turbulence in global financial markets and the rising price of gold—it’s no surprise. However, the price of silver has also risen dramatically.

On August 14, the price of silver closed at $39.10 an ounce. That’s up from $30.53 in mid-February and up from $17.99 in mid-August 2010. In a year, silver investors have more than doubled their money. And all this despite a ‘blip’ in the price of silver when the price dropped in May from a high of $48.58 to under $35.

While the increase in gold has certainly helped investors who bought gold, the ‘stealth’ gain has come in silver. Is now a good time to buy silver bullion as part of your investment portfolio? Or is the price likely to decrease?

Let’s take a look at demand first. Silver is used extensively in jewellery, photography, silverware, and in coins. Some of the many uses:

• Water Purification
• Medical
• Mirrors
• Coatings
• Solar Energy
• Water Purification
• Batteries
• Bearings
• Catalysts
• Electronics

Consumer demand for silver is also strong—especially in emerging and developing markets like silver. This increases demand. And the same global economic factors affecting the price of gold are affecting the price of silver. These include economic uncertainty in Europe and prolonged lack of serious growth in the United States.

Silver is a scarce commodity—like gold. Supply never really catches up with demand. Especially now that silver is being used extensively in growing technologies like solar energy. The Silver Institute says that demand for silver from industry will increase 36% by 2015. And from 1990 to 2000, global consumption was over 2 billion ounces. In 2011-12, consumption in India could top 1,200 tons—based on government figures.

Looking at The Ratio

The historical ratio of the price of gold to the price of silver is 20:1. The ratio is currently 33:1 which means many experts believe silver is due to catch up–making it a good time to think about buying silver. If the ratio catches up, the price of silver could increase to over $100 and even climb to $175.

One country that’s going to continue to buy gold is China. In the past two years, China’s appetite for gold has been insatiable. The country has gone from being a net exporter (100 million ounces a year) to a net importer (150 million ounces a year). The Chinese are buying silver as a hedge against the decline of the U.S. Dollar and the threat of internal inflation.

So it’s an excellent time to think about buying silver to add to your portfolio. The reasons investors buy silver are clear—and motivating these investors to buy this valuable commodity.

A lot of people wonder how they can protect their wealth. Super rich and ultra wealthy individuals have been doing it for centuries – investing in HARD ASSETS like gold and silver bullion. This short YouTube video is an expert interview by Exponential Growth Strategist Dr Marc Dussault and Peter August, CEO of The Australian Bullion Company. It’s only 4 minutes long, but reveals what high net worth individuals are doing right now.

Video transcript: Gold and Silver Safe Haven Investments

Hi, I’m Dr Marc Dussault and I’m here with Peter August, Managing Director of Australian Bullion Company.  And as you can see I have a blackberry mobile phone and I have some gold and silver bullion coins and some bars as small as this over here, 20 ounce, 10 ounce, I have a 1 kilo here and a 5 kilo which as you can see is quite heavy.

It has a good feel to it.

I know, I just love doing that and I’m sure you can hear that on the video.  Peter, really in the next 60 to 90 seconds…

Sure.

Why would someone invest in gold or silver bullion compared to the stock market or property market?

Safety, safety, safety; okay, you’ve got the ultimate safety, the ultimate safe haven investments here.

Because it’s physical, because you can touch it, you can go to your safe and take a look at your coins and your bars and you know…

You know how much you’ve got in value.

Yeah. Read more…

A lot of people wonder “Why is the price of gold high and how is the value determined?” This short YouTube video answers this and other interesting investment questions. It’s an expert interview by Exponential Growth Strategist Dr Marc Dussault and Peter August, CEO of The Australian Bullion Company.

VIDEO TRANSCRIPT: GOLD PRICE AND VALUATION

Hi, I’m Dr Marc Dussault and as you can see its November, it’s 2009 and I’m here with Peter August, Managing Director of the Australian Bullion Company.  And I wanted us to take some time today to explain something that for you is self-evident but for other people out there who are considering gold as an investment what they might not know is that these are actually gold bars and we have 105 ounces of gold right here, which by the way in today’s price is worth how much?

Over 120 thousand.

Over $120,000, so it’s a great compact way to invest.  Now one of the things that we’ve all done as a kid, and Peter you remember your days back when you were a child and you started investing in coins and collecting coins.

Yes.

There’s this thing called the numismatic value of coins.

Sure.

Can you explain what that really big word is for people.

Yeah, absolutely.

Cause I have a coin here, and I have another coin here; so what’s the difference between this one and that one, other than the size?

Sure.  Okay; this particular coin Marc is a 1 ounce gold coin.

Okay.

It’s 4 nines pure so that’s 99.99% pure, and it is bought and sold on it’s intrinsic gold value.

Yeah.  So you’re buying it because it’s 1 ounce?

That’s correct.

Okay.

Now this…

And this by the way is a 1 ounce gold bar.

That’s correct. Read more…

Today’s YouTube video is very short – explaining why gold and silver bullion investment is an ideal choice for wealth protection. Dr Marc Dussault interviews Peter August, CEO of The Australian Bullion Company, to explain why high net worth individuals are buying gold and silver like never before. This is a series of interviews that you can view on our Australian Bullion Company YouTube Channel.

Video transcript: Gold and Silver Bullion For Wealth Protection

Hi, I’m Dr Marc Dussault, and you can see it’s November, we’re in 2009, I’m here with Peter August, the Managing Director of the Australian Bullion Company.

Peter I want to thank you, hello, yes of course.  We’ve been sitting here for about, well I won’t say how long we’ve been doing these tapes but it’s been a great morning here and what we’ve done is we’ve put together a handful of YouTube videos that you can access through clicking the bubbles that you’ll see on the YouTube videos.  And what we’ve done is we’ve explained why you would invest in silver and gold bullion.  And we’ve explained also the difference between numismatic coins, in other words coins that you collect, as well as these bars here that I do know now that these are bars and not coins; and to take you through the process of why you would invest in gold or silver bullion.

Now we’re talking about different things; if you would just summarize, just in one sentence why someone would invest in gold bullion, or silver bullion, compared to anything else, what would that be?

To protect their wealth, their hard earned wealth, in fragile financial times.

And when we say protection we’re talking about an increase of about 10% historically that you’d recommend people have in bullion…

Sure.

In respect to their total value of their asset base, to now about 15 to 20%.  So you’re not saying sell all your stock, sell all your properties, but just increase the proportion of the gold and silver that you have within your portfolios.  Am I right?

Absolutely.  This is your insurance against calamity.  Okay, now I mean 10 years ago the risk of any kind of financial calamity, or geopolitical calamity was quite small so henceforth you had a very low gold price.  But that risk has increased dramatically. Read more…

This second video follows on from Part 1 that discusses gold versus silver investment. In this second part video, Peter August of The Australian Bullion Company reveals why sophisticated investors buy silver and gold bullion to create and protect their wealth.

VIDEO TRANSCRIPT: SILVER VERSUS GOLD INVESTMENT – PART 2 OF 2

Hi, I’m Dr Marc Dussault and I’m here with the Managing Director of the Australian Bullion Company.

Hi, Marc.

I’m sorry?

I said, hi Marc.

Yes.  And his name by the way, this happens every once in a while when do these…

I do like to be polite.

His name is Peter August.  So I apologize for not using his name because obviously we know each other, but you might not know him.  So getting on to this, we’re doing a few, a series actually of YouTube videos.  And what I have here are silver bars and what I wanted to focus on, you started mentioning something and I stopped you at the end of another YouTube video, we’re talking about silver as another investment.  Now I was in the printing industry where silver was used fro photographic purposes in film.  And a lot of the industry thought, well when film goes the price of silver is gonna plummet; because obviously film was a big user of silver components within the actual film manufacturing process.

Okay, well just…

But that didn’t happen. Read more…

Investing in gold is popular these days. People are investing in gold like never before, but a little known fact is that silver bullion investment is also gaining in popularity. Watch this short 5 minute YouTube video that explains the differences between gold versus silver investment.

VIDEO TRANSCRIPT

Hi, I’m Dr Marc Dusault, I’m here with the Managing Director of the Australian Bullion Company Mr Peter August and we’re sitting here with gold, and this is 105 ounces of gold bars and this is another ounce of a coin.  And I just wanted to show you what it actually looks like; and it’s actually as heavy as it sounds.

Now just so you can see, this is a regular blackberry mobile phone and we have a series of YouTube videos that explains why you should invest in gold.  But what I wanted to do in contrast, and I’m just gonna move the phone over here just so you can see the difference in size.  Again this is just a regular, this would be about the size of a 20 cents piece wouldn’t it?

Yes.

Okay, so a 20 cent Australian piece, and it’s actually you know very attractive because once again it’s a coin, whereas these are bars which have a little bit more of a rough texture.  But the contrast I want to show you is with silver.  Now this is 1 kilo which is about, it’s about all of this isn’t it?

One kilo is that.

Is that.  So this, is that.

It’s a dramatic difference isn’t it?

Yeah, it’s a huge difference.  Now this is silver and I, you have to sense how heavy this is and when you look at it it’s got that rough texture we talked about in the other YouTube video about bullion, and it’s stamped, and it’s actually when you touch it it’s got a really nice feel to it.  I want to show you another one, this one is how much, 5 kilos.

That’s correct.

Now I’m not gonna drop it from too high up okay, but… Read more…