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Eddi McGuire Celebrates Million Dollar Hot Seat Anniversary with ABC

June 10th, 2014 No comments

Eddi McGuire

 

To celebrate Million Dollar Hot Seat’s 1000th episode airing tonight, Eddie McGuire immersed himself in some of Australia’s finest Gold bullion. Help secure your financial wealth with investment grade bullion by contacting us today. Picture: Mark Stewart Source: News Corp Australia

 

 

The History of Silver

April 3rd, 2013 No comments

Silver Production B.C.

Silver mining first began around 5,000 years ago and many ancient civilizations would have never made it had they not had great deposits of the highly prized metal. In the sixth century, B.C., Lydia, an ancient country of Asia Minor became the first kingdom to use minted coins, made from gold and silver. Around 482 B.C. a large deposit of silver was discovered near Athens, Greece. Enemy soldiers were enslaved and forced to mine the silver since it was contained within toxic lead ore. At the height of production, there were 20,000 slaves working in the mines.

Silver in the Old World

Around 100 A.D., Spanish mines became the primary supplier of wealth for the Roman Empire with Spain becoming the silver production capital. Silver quickly became a vital trading component along the spice routes of Asia.  Soon thereafter, silver mining spread throughout Central Europe and the region. There were numerous large silver mine discoveries in Europe from 750 to 1200 A.D., and the Saxon kingdoms of Britain began issuing silver coins known as Sterlings around 775 A.D. This increase in the number of mines as well as improvements in production and technology led to significant growth in silver production between the 11th and 16th centuries.

New World Discoveries

The discovery of the New World and the Spanish conquests that followed literally reinvented the role that silver would play throughout the world from that point forward. Massive silver deposits in Peru, Bolivia and Mexico dramatically eclipsed all silver mines found prior to that. Silver production from these three countries accounted for over 85 percent of production and trade worldwide during the 16th through 18th centuries. During the 17th century, Holland had become a world trade power using silver coins called “thalers”. When they founded “New Amsterdam” (later named New York) on Manhatten Island they brought their thalers with them, which locals began to refer to as “dollars”. When the United States of America was founded, they based their currency on the value of silver. In 1859 the famous Comstock Lode was discovered in Nevada and was reportedly so massive that silver ore could literally be shoveled off of the surface of the ground.

Increased Production

By the 1870′s the U.S. had become the world’s largest producer of silver. The next fifty years saw an explosion in technological innovations and exploitation throughout the new world regions. Production in the latter part of the 19th century quadrupled that of the turn of the century, reaching nearly 120 million troy ounces produced annually. Also, new discoveries in Central America, Europe and Australia greatly enhanced world silver production, which grew another 50% in the first twenty years of the 20th century. Even though many of the world’s high-grade ore deposits were depleted by the end of the 19th century, improved technologies and new discoveries have enabled production to continue to increase to today’s rate of over 600 million troy ounces per year.

The most amazing aspect of silver production, historically, is actually on the other side of the equation. Regardless of the rate of production or the civilization involved, demand has always kept up with, and often exceeded, the supply. This phenomenon of demand exceeding supply is expected to increase exponentially as industrial uses and investment demand continue to grow and the world’s deposits continue to dwindle. This current situation that the economy is in makes it a much more lucrative decision to buy silver. For more information on the types of silver to invest in, contact Australian Bullion Company.

Five Common Precious Metal MYTHS

March 20th, 2013 No comments

Buying gold, silver bullion and other precious metals is one of the least understood investment options open to inexperienced investors.

When investors take the time to look at the facts about precious metals in the light of day, they soon discover that all of the old myths about buying and selling gold and other precious metals can’t stand up to the examination.

Let’s take a look at five of these common misconceptions about precious metals.

1. Gold and silver investing is only for wealthy high rollers.

You don’t need to be a millionaire to get started in buying gold or silver. Many average investors are putting up as little as one hundred to one thousand dollars to start their precious metals portfolio. So, with extra cash you may have on hand, you can begin to invest in rather inexpensive coins and silver bars. In fact, people from all levels of income are investing in gold and silver to protect themselves and their money in case of an emergency or disaster.

2. Precious metal investing is only for the experienced investor.

Many investors believe precious metal investing is too difficult to understand, but this is also far from true. Gold and silver are globally traded and information on the global demand and supply of these precious metals are not some closely held secret. Everything you need to know to be a smart investor is available anywhere in the world.

Actually, silver is one of the safest investments anyone can make. It’s virtually fool-proof. Whether you choose to invest in silver coins or silver bullion is up to you, but both hold their value extremely well, and both make an excellent investment.

3. Investing in gold is risky business.

Gold is actually one of the least risky investments you can make. Unlike paper investments, gold will never lose all its value. There will always be a demand for gold. Right now the demand for precious metals, such as gold, silver and platinum, is on the rise, while the supply from annual mine production is falling rapidly.

Another factor strengthening gold as an investment is the inflation caused by rising oil prices due to increased demand and declining production. Another trend in gold’s favour is the increase of money supply by the central banks, which causes a decline in the purchasing power of paper currency. All these factors make gold a safer investment.

4. Gold is not a very good investment.

When compared to recent major stock indices, gold’s performance may look weak, but that’s not necessarily true. Over the last ten years, gold has registered an average annual return of about 20 percent, which is certainly respectable. As far as the DOW is concerned, companies come and go. They perform poorly, go bankrupt and totally disappear and are then replaced on the DOW by newer, higher performing companies. Your money is safe in the stock market as long as you pick the winners and avoid the losers. Gold, on the other hand, may not make you get rich quick, but it’s value is not going to disappear overnight, as is the case in some publicly traded companies. Gold’s main purpose is as a wealth protector.

5. Precious metals are not a very good inflation hedge.

The truth is that since 1971, gold has steadily risen in price against fiat currencies when the global gold standard was abandoned. During that period of time, all of the world’s currencies have greatly depreciated in value when compared to gold. The purchasing power of the American dollar, for example, is only 20% of what it was in the early seventies. On the other hand, gold increased its purchasing power and will continue to do so as long as the central banks continue printing more money than the increase in the national GDP.

As far as precious metals are concerned, it pays to keep an open mind. Do your due diligence and explore the reality behind the myths and you will be surprised by how much value there is in precious metal investment, especially as a wealth preserver

Silver: The Hot Commodity for Investment?

January 25th, 2013 No comments

Gold has long been the darling of the precious metals investment game but more and more industry experts are saying that it just may be silver’s turn to shine. Jim Rogers, one of the world’s most successful investors, recently noted that silver appears to be a better play than gold right now, at least for the time being. It has actually out performed gold, albeit slightly, over the past five years.

Current Market Variables

Silver is the only major commodity that has not reached a new all-time high during this bull market. It is cheaper now than it was thirty-two years ago. Historically gold has been worth 12 to 15 times that of silver, however it is currently valued at roughly 50 times that of silver. This current value ratio gap between gold and silver is actually far from normal and means that it will likely correct itself as history has proven over and over again. The most likely way that it will do this, many speculate, is that the price of silver will experience a boom and naturally close the gap.

Industrial Demand

Silver has many industrial applications and is essential to the production of medical, telecommunications, computer and automotive equipment, to name a few. Industrial demand typically consumes anywhere from 50% to 80% of global mining production, leaving as little as 20% for use in jewellery and coins. As silver’s industrial applications have grown, it has led to incredibly large, periodic gaps in supply, hence the volatility. The outlook on global industrial demand continues to be quite promising with China’s mammoth appetite for precious metals that are essential to its continued dominance of product manufacturing. Of course, more demand and limited supply is exactly what we, as precious metals investors, are looking for.

Investor Demand

Silver is well known for its sudden and dramatic price swings. This volatility is one of the reasons that many precious metal investors have stayed away from buying silver, preferring the relative stability of gold. However, many savvy investors, like Jim Rogers, believe that it is silver’s volatility that now makes it a potentially ideal investment with the expectation that the U.S. Federal Reserve will announce another round of quantitative easing this fall. It is widely speculated that the program, if implemented, could cause a mad rush for silver. This projected increase in demand from investors and industrial applications could lead to silver prices soaring.

When you combine silver’s relatively low spot price with the potential increase in demand, it certainly warrants close consideration as a part of any investment strategy.

Buying Bullion Bars or Coins: Which is the Better Investment?

November 8th, 2012 No comments

Many investors have decided that it is safer to have precious metal in hand than it is to invest in precious metals Exchange Traded Funds (ETFs). Granted, the cheapest and most convenient way to invest in and trade with gold and silver is ETFs, but they also come with more long-term risks. Risks such as, but not limited to, counter party risk, which means that the precious metal is not actually held by the ETF provider. It’s typically held by a large bank and if the bank goes bust, your investment could disappear as well.

Besides, how do you know they’re actually holding the precious metals that they claim to be holding? Along with this are the U.S. Commodity Futures Trading Commission and the Gold Anti-Trust Action Committee that reported that the actual physical gold that exists globally above ground is only 1% of the ‘paper gold’ that is being traded.

The Shiny Stuff

Buying physical gold and silver is undoubtedly more expensive than purchasing ETFs. First you have the dealer’s premium that you will incur when you buy it. You will also have to factor in delivery, storage and even insurance costs. Then when you sell, there is typically a dealer fee as well. Of course, buying and selling gold and silver is also not without risks either.  Gold and silver prices could drop through the floor resulting in a loss on an asset that may not be easy to sell. However, when you look at current market conditions and global economic trends, investing in physical precious metals definitely warrants close consideration. So what form of precious metal do you buy? Bullion and coins each have their own merits and drawbacks and both should be assessed as to how they fit your unique needs and investment strategy.

Coins

Coins can be quite elaborate and attractive and easy to purchase in small amounts. Since they are something with which most of us are familiar, they can also be a little less intimidating than bullion, at least at first. Some coins are rare and collectible which can add even more complexity to the investment. It should be noted that the added value of being a collectible is often in the eye of the beholder. Collectible and antique coins are very specialised markets and should probably be avoided unless you really know what you are doing. Collecting coins can be fun and rewarding but for true investors, most would agree that bullion is a wiser choice.

Bullion

Precious metal investors focus purely on the metal value rather than getting caught up in collectible values. Bullion is easy to sell, hard to fake, and is typically more pure than coinage and the premium is generally lower as well. For the serious investor, gold bars are the simplest and most efficient way to invest in precious metals. Larger bars are generally available for the lowest premiums over their intrinsic metal value. The trade-off is that they are not quite as flexible as smaller bullion portions when it comes time to sell.

Even though most investors would agree that bullion bars make the most sense, like most things, investment strategy is an individual pursuit and only you can determine what’s best for you.

Quick Facts About Silver & Silver Investment

October 12th, 2012 No comments

Of all the precious metals on this planet, silver is by far the most widely used and certainly the most interesting when you look at its history, its inherent qualities and its potential as an investment vehicle. Even though it has long played second fiddle to gold, buying silver is quickly growing in popularity with investors for a variety of reasons. So let’s take a look at some interesting facts about silver:

HISTORY

Silver was first mined in Asia Minor sometime around 4,000 BC.

Man learned how to effectively separate silver and lead around 3,000 B.C.

Throughout history, silver has been used for money more than gold has.

In early Egypt and Medieval Europe, silver was generally considered to be more precious than gold.

‘Sterling silver’ references the grade of silver and the standard of .925 emerged from England sometime in the 13th century.

Silver has always been highly regarded and displayed as a status symbol.

HEALING QUALITIES

Silver kills bacteria and viruses by chemically acting upon the cell structure and inhibiting their cell growth.

Bacteria do not typically develop resistance to silver like they do with many antibiotics.

‘Born with a silver spoon in their mouth’ is an expression that originally referred to health status rather than wealth. It was believed that children who were fed with silver utensils would be healthier.

Recent medical research indicates that silver can actually promote the production of healthy new cells and increase the rate of healing for wounds and damaged bone.

CHARACTERISTICS OF SILVER

Silver’s many unique properties include, but are not limited to, its strength, ductility, malleability, conductivity, reflectivity and its ability to withstand extreme temperature.

Silver’s melting point is 960 degrees C.

Silver is softer than copper yet harder than gold.

APPLICATIONS

There are many more industrial applications dependent upon silver than there are for gold and more and more applications are being discovered and developed every day.

Silver has long been used to protect space craft from extreme temperatures.

Jet engines utilize silver bearings due to their superior performance.

The production of hydraulic fluids, polyester fabrics, engine antifreezes, and flexible plastics like Mylar, is much more efficient thanks to silver.

Silver is used extensively in the automotive, electronics and medical industries.

Modern cars use silver coated contacts for virtually every electrical action.

SHRINKING SUPPLY

Today, Mexico and Peru are the biggest producers of silver.

Over two thirds of global silver productions is a by-product of copper, lead and zinc mining.

Silver production as well as secondary recovery efforts have been unable to meet demand for the last fifteen years.

There were approximately twelve billion ounces of silver available in the world in 1900. Today, that estimate has fallen to around three hundred million ounces of refined silver above the ground.

GROWING DEMAND

Compared to gold, the cost to invest in silver is very low, making it more attainable for the average investor

Silver investors are buying and hoarding rather than selling.

Industrial demand seems to be growing steadily.

The U.S. Federal Reserve is still suggesting that the central bank is prepared to start another round of quantitative easing. Silver performed extremely well during prior periods of quantitative easing and this alone could result in a rush on silver.

The price of silver per ounce has historically been the equivalent of 1/16th of an ounce of gold, meaning that an ounce of gold was worth approximately the same as 16 ounces of silver. That ratio is currently around 1/50th and history has shown that this value ratio has had a way of naturally correcting itself.

So whether or not you are fascinated by the history and characteristics of silver, it doesn’t take a crystal ball to see that demand for silver will continue to grow while the supply continues to dwindle. And of course you don’t have to be an expert investor to understand what the intersecting variables of supply and demand may do to silver’s value in the future.

Is Silver A Better Investment Than Gold?

September 11th, 2012 No comments

Investing in bullion and precious metal has proven extremely lucrative in recent years, with the investment beating out almost every other vehicle in terms of yield.  Everyone has heard about the astronomical price that gold has risen to; but have you considered silver?  Which is the better between the two, in terms of investment potential?

Of course, no piece of investment advice applies to every situation, but you may want to keep these three considerations about silver in mind:

  1. Lower per unit cost

Since silver costs significantly less per ounce than gold, you can buy more of it for the same amount of capital investment.  This means that you can realize greater gains on your investment over the long term.  The price of silver is inherently volatile, so you have a lot of opportunity to take advantage of this with a low unit cost on the metal itself.

  1. Exciting new industrial uses spur demand

There have been all sorts of interesting new industrial applications for silver, which will spur demand for it for years to come.  It has the highest conductivity of any metal for both electrical current and thermal heat.  It also has the ability to kill bacteria without harming healthy cells, which has brought it into prominence for medical applications.

  1. Silver to gold ratio remains advantageous

Historically, based on the relative rarity of the two metals in the crust of the Earth, the price of gold should be approximately 16 or 17 times higher than the price of silver.  As of the writing of this article, gold is just over $1,600/oz., and silver is just over $30.00/oz (Note that prices will vary: Check out the latest spot prices here).  That is a ratio of over 55:1; so the shrewd investor can see silver is an incredible bargain currently.

Now, this isn’t to say that silver is always a superior investment to gold, because it isn’t.  Gold has a certain safety that silver doesn’t have, and the market certainly doesn’t have the same kind of volatility.  While silver can gain value extremely quickly, it does drop in value equally quickly at times; so you need to be aware of this if you decide to invest into silver. Generally, the best strategy is to diversify your investment into a range of metals, including both gold and silver.

Speak with a qualified investment professional to help provide you education on how best to invest your money into precious metals.  Make sure you take advantage of the great potential returns and relative safety of this fantastic investment instrument.

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Falling Silver Prices Present an Opportunity

June 18th, 2012 No comments

Both silver and gold markets have experienced some volatility in recent periods. The current low prices could be an attractive opportunity for investors seeking to buy silver and perhaps later to sell silver at a higher price. We look at some of the recent trends on the silver market, including demand drivers and changes to Chinese regulations, and how investors might be able to take advantage of the opportunity.

Recent trends

While silver prices have experienced some volatility, silver prices have risen at twice the rate of gold prices in the past year, according to a recent report (by Debbie Baratz) published on CBS News.

  • Silver still has a role as a commodity for wealth storage. Its attractiveness to investors seeking to buy silver or sell silver comes from the fact that it is an in-demand material for industrial and technological applications. As such, the current volatility could be a positive thing for investors seeking short-term speculative gains.
  • More investor confidence in the global economy tends to increase growth, which in turn tends to boost demand for silver. For this reason, there may be opportunities for investors looking to buy silver and hold beyond the end of 2012.

Demand drivers

Silver sales have been forecasted to increase by some well-known silver market commentators, including David Jollie as reported by Bloomberg News, and Philip Klapwijk in an April 2012 interview with Dow Jones Newswires.

  • According to the Silver Institute’s figures for 2011, around 80 per cent of silver demand is linked directly to fabrication demand (encompassing industrial demand), which has been forecast by the Institute to continue increasing sharply until 2015.
  • The growth in demand is likely to be driven in part by China’s growth and the growth in demand for electronics products around the world.
  • Anticipated further loosening of monetary policy around the world might also lead to increased demand for silver from investors.

Given these demand factors, the current trough in prices could be a great opportunity to buy silver.

Changes to silver trading regulations in China

The Shanghai Futures Exchange began trading silver futures in May, so private investors in China can now trade silver futures, which is likely to have a positive effect on silver prices. Previously, Chinese investor could only trade indirectly or on the international markets when they wanted to buy or sell silver futures. The introduction of the silver futures market could boost market size and lead to increased liquidity.

While silver prices have fallen in recent quarters, there are several good reasons to have a bullish outlook for the coming year. A range of demand drivers and the introduction of silver futures trading in China are likely to spur silver prices in the medium term. This could mean it is a good time to buy silver now.

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How might cost pressures and reduced supplies affect the decision to buy silver?

April 24th, 2012 No comments

Mining companies around the world are feeling the pressure from rising oil prices, labour costs, and taxes. Industry leaders at the Reuters Global Mining Summit in early April 2012 have suggested that keeping a steady level of supply and boosting production of precious metals could become a challenge with these increasing costs. A reduction in silver supplies could push up prices and make it a good time for investors to buy silver.

Reuters reported that while many miners were reporting record profit margins, capital costs for building new projects were surging with energy, material, and labour prices. An example of this was Newmont Mining’s recent shelving of its Hope Bay gold mining project. The project was cancelled and written off for $1.61 billion. With many investors keen to buy silver, rising costs of mining and exploration could potentially push up silver prices.

Are silver supplies going up or down?

Will we see a curtailing of supply due to cost pressures driving higher demand to invest in and buy silver? Based on very long-term historical averages, Mexico has been the world’s largest silver producer, providing around one-third of the world’s silver over the past 500 years. It was overtaken by Peru in 2009 but still accounts for around 20 percent of world silver production. In 2010, Mexico produced 3,500 metric tonnes of silver. Peru, China, Australia, Chile, and Bolivia are some of the other major silver producing countries that tend to produce and sell rather than buy silver.

The Silver Institute’s 2011 World Silver Survey found that total silver supply rose by 15 percent in 2010, though the growth was led by producer hedging and government sales and recycling. Mine production grew by only 2.5 percent in the same period, although supply levels were at a historical high of 23,889 tonnes.

Scrap supply or reuse rose by 14 percent in 2010, predominately through industrial and jewellery recycling. At the same time, industrial demand to buy silver grew by 20.7 percent, with strong growth in coin minting, solar panel production, the car manufacturing industries, and the jewellery industry, all of which drove the demand to buy silver.

Is it time to buy silver?

While figures indicate that silver production is still high, it should not be taken for granted that supply will be sufficient for everyone who wants to buy silver. Demand to buy silver across different sectors is growing, particularly in the industrial sectors. Should energy and labour costs continue to grow to the extent of affecting viability of new projects, silver prices could continue to see high growth over the long-term. This could mean that now might be a good time to buy silver.

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Silver on the Rise, On Par with Gold: is it time to buy silver? 

March 28th, 2012 No comments

While gold is a hot commodity right now, for those who want to buy silver, there are hints that it will be a big commodity in 2012. Over the past few years, silver has followed in gold’s footsteps, often reaching similar milestones as gold, but there have been instances when silver has taken the lead in value. Is it a good idea to buy silver?

  • Historically, silver has proved more volatile than gold, fluctuating more dramatically, but while the silver market is generally smaller than the gold market, silver has mostly followed the same price patterns as gold even though fewer investors are keen to buy silver.
  • In 2011, silver almost doubled in value in a matter of months, reaching a high of $49.21/ounce around April. Gold also increased at the same time, but not such a percentage. This silver high ended in early May.
  • Silver has grown in value 37.62% from 2001-2010 and is continuing to rise suggesting that people are more willing than ever to buy silver. It is also worth noting that over the last decade, silver has ruled the precious metal markets in terms of returns, sitting at an annual return of 20% while gold is at 19% (and copper at 18%).
  • Surprisingly, though, this trend was not replicated at all last year. Gold increased overall in 2011, while silver decreased by about 10%.
  • In 2012 however, gold and silver are both currently surging since the Federal Reserve has now prolonged its low interest rate policy from mid 2013 to late 2014, making it possibly an ideal time to buy silver.
  • In 2012, some analysts predict that there is a strong possibility silver will at some point reach the $50 or $60 threshold and catch up to gold in terms of growth.
  • Reuters, however, is forecasting that silver will only increase up to $35 in 2013, despite some potential $50 highs, while gold will move to $1,835, which is only a 4% increase from their 2012 forecast.
  • It’s quite likely that whatever happens, silver will closely follow behind gold’s fluctuations, with the potential to surpass it in growth at various points in the near future, especially given the instability of the global markets.
  • If you’re looking to buy silver, it could be better to invest now, while it’s cheaper to buy silver. Also, some investors are showing a reluctance to buy silver, given its slump in 2011, making it more accessible than gold.

Will be buy silver or gold in 2012? Perhaps some investors will be tucking a little of both into their portfolios.