When I was around four years old my father and grandfather invested a full day in me and fishing. I can’t recall how many fish we coached to shore but I vividly recall asking far more questions than any father with a much-needed day off should endure. Finally my father resorted to a generic reply of, “because that is simply the way it works” to each unanswerable question that only a four-year old mind can create. Unfortunately, explaining the purpose of PM is far too important for a generic reply. Many of you are sending questions to The Prospector Site and we appreciate each question and comment, thank you. The value within each question goes beyond an answer so let me explain. Gold and silver dialogue, or questions, create further discussion and interest in the one nontraditional asset each person should now own. Not every question is answerable but each question is worthy of a reply. Today I want to share a couple of what I call common questions from a reader willing to invest time and money to preserve financial wealth via silver and gold, congrats.
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Hello, I am an European reader and I am very fond of your site ( found about it while reading dailyreckoning.com ). I have read your website from the beginning, started last month and only now got to March. It has been very enlightening but I never said anything up until now. I wanted to read the whole site so that I could have a grasp on what the global scene was month after month, since March last year, basically reading the gold/silver economy trend, trough your posts. I have now stepped up and registered at Bullionvault.com buying small amounts of silver.
I would like to ask you 2 questions:
1. What will happen to the silver market if the copper is “the” next silver, will silver drop in prices?
2. Why if there is a gold dip, there is a silver dip at approximately the same proportion?
Thank you very much
Regards from Europe
PROSPECTOR REPLY: Always great to hear from our European readers so thanks for the comment and questions. I’m not sure if you know or not but you guys are in the news a bit lately? You mentioned something that really grabbed my attention with an interest in the global scene as part of your decision-making process to buy silver. I’m flattered our site is part of this decision so thank you for using us as a PM resource. Starting with small amounts of silver is exactly how I advise clients to begin a soft entry into PM (precious metals). Silver is relatively cheap to own and easier to buy allowing newbies time to develop confidence in PM without spending boatloads of money in the process. I do recommend owning both metals ONLY AS YOU FEEL COMFORTABLE in doing so.
Now, to question #1. I see no long-term drop for silver considering all worldwide currencies committing to printing themselves out of economic trouble. Injecting fiat currency into world markets will drive up value and demand for real money, like silver, and copper rising is no more a factor than two ships rising from the tide, simultaneously. My opinion is most metals in limited supply will find monetary attraction but nothing like silver or gold. Copper and nickel could easily be included in future monetary attraction but they will not suppress or replace silver, not in my opinion.
I see slim odds of silver doing anything but putting smiles on silver holding faces; this comes from a guy not selling silver or gold. Please stay in contact by letting other readers know how Bullionvault.com is working out (I’m assuming you’re using their vault in Zürich?). Some PM advisers are hesitant to recommend passive storage but each person must judge risk accordingly depending on local volatility and government overreach. Diversifying storage is as important as diversifying wealth in general (hope this makes sense).
Now, to question #2. You are correct by noticing both silver and gold follow lockstep to monetary demand, kind of. Silver has one over gold and this one thing is a very big thing. Silver is now the second most used commodity, we can thank modern-age technology for this. Silver is a great conductor and technology now contributes to silver’s demand. This means silver has monetary value (money) and industrial value simultaneously. This is why PM experts feel silver undervalued and will close the silver to gold ratio very soon. Paper silver suppression obviously is a major factor in today’s cheap silver prices (I hope all are taking advantage of discounted physical silver).
Regardless if (when) silver closes the gold gap; both historically parallel each other in true relevance and value. This is because both metals are real money and no amount of fiat printing will change monetary balance. Both metals float along inflationary rivers willing to rise to whatever point necessary to equal true value and worth. This is why I started trading currency for metal ten years ago to the month. I’m guessing this is why you are too. Thanks for the great questions and welcome to The Prospector Site.
IF OTHER READERS HAVE A QUESTION OR COMMENT WE WOULD LOVE TO HEAR THEM. REACH ME HERE.