Silver Prices Rising As We Near A Big Crash, QE's Collapsing U.S. Currency, EU Brink Of Collapsing

Dec. 20, 2012 - PRLog -- One of Singapore’s largest suppliers of silver coins and bars to retail investors, says sales tripled since October, part of an international surge in demand that drove holdings to a record. “Our customers are worried that a major currency crisis or mass bankruptcies would happen,” stated Gregor Gregersen, the 36- year-old founder of Silver Bullion, whose sales now average about S$6 million ($4.9 million) a month. “It all has to do with falling self-confidence in the heavily indebted Western governments and financial institutions.”

International investment through silver-backed exchange-traded goods reached a record 18,854 metric tons in November, or more than nine months of mine output, information compiled by analysts show. Holdings are now valued at about $19.2 billion. Prices will rise as much as 29 percent to $40.25 an ounce next year, based on the median of 49 analysts, trader and investor estimates compiled lately. How High Will Silver Go? Learn More >> http://silver-dollar-values.net

Silver nearly tripled since the finish of 2008, lagging behind only platinum in gains for precious metals this year as policy makers from the U.S. to China to Europe pledged more action to boost economies. That is attracting investors betting that stimulus will stoke inflation and debase currencies. It is also luring those wagering growth will strengthen industrial demand for silver, 53 percent of which is utilized in every thing from televisions to batteries.

The metal advanced 12 % to $31.09 this year, compared with a 6.6 % gain for gold and 13 percent rise for platinum. The Standard & Poor’s GSCI Index of 24 commodities was little changed and the MSCI All-Country World Index of equities jumped 14 percent. Treasuries returned 1.8 %, according to a Bank of America Corp. index.

Hedge funds and other large speculators increased bets on higher prices 12-fold since the finish of June, to a net 34,862 futures and options, U.S. Commodity Futures Trading Commission information show. That’s about 50 % higher than the average over the past five years, a period during which speculators have never been bearish.

Investors bought 1,464 tons through ETPs this year, information compiled by analysts show. They will probably add another 300 tons in 2013, Barclays Plc estimates. That is less than the so-called implied physical surplus that the bank says would reach 6,441 tons in 2013. Its analysts expect silver to average $32.50 next year, from $31.20 in 2012.

The surplus may drag prices lower should economic development slow because it would curb demand for consumer goods. A car contains as much as 30 grams and a mobile phone about 0.25 gram, according to the Washington-based Silver Institute. While the International Monetary Fund expects a 3.6 percent international expansion in 2013, from 3.3 % this year, the forecast was cut twice since July. Rare Coins, Silver Coins, Gold Coins >> http://www.silver-dollar-values.net/Selling-Gold/

The metal retreated 23 % in 2008 as the global economy tumbled into a recession. Japan and the 17-nation euro zone are contracting again this year and the Congressional Budget Office says the U.S. economy faces the same risk should lawmakers fail to resolve more than $600 billion of automatic spending cuts and tax increases scheduled to start next month.

Investors may also be dissuaded by the metal’s price swings. Its 100-day historical volatility is almost twice as high as gold, meaning investors are subject to bigger losses as well as gains. Silver for immediate delivery reached a record $49.79 in April 2011 before tumbling 35 percent in less than three weeks.

Comex silver futures are valued at about $22.6 billion, compared with $72.4 billion for the bourse’s gold contracts, data compiled by analysts show. Members of the London Bullion Market Association handled an average of $34.7 billion of gold a day in October, and $3.26 billion of silver.

Investors own 18,760.34 tons through ETPs, less than 1 percent below the record set on Nov. 15. Morgan Stanley predicts they will add a further 500 tons in 2013. The bank stated in a report Dec. 6 that silver is among its top commodity picks for next year, along with gold, corn and soybeans, because it will be boosted by investor demand and a weaker U.S. currency.

Central banks are seeking to increase development through printing money; increasing investor concern the actions will debase currencies and spur inflation. The Federal Reserve said Dec. 12 it would buy $45 billion of Treasury securities a month from January, adding to $40 billion a month of existing mortgage-debt purchases. Silver jumped about 53 percent during the first round of so-called quantitative easing from December 2008 through March 2010, twice the gain in gold. It advanced 24 percent in the second phase that ended in June 2011, about three times more than the other metal. The central bank bought $2.3 trillion of debt in total.

The scale of intervention is a sign to some investors that markets will be roiled once more by monetary meltdowns. That’s reflected in Silver Bullion’s sales, which reached S$38 million in 2011, from S$700,000 in the first year of business. Orders were also boosted by the government lifting a goods and service tax on investment-grade gold, silver and platinum from Oct. 1.

“There’s going to be another big crash, we are really near it now,” stated Chin Kuan Yew, a businessman and Silver Bullion customer who sold all his properties, including his condominium, to buy more metal. “You have on the one hand the U.S. printing money and the European Union is on the brink of collapse.” How High Will Silver Go? Learn More >> http://www.silver-dollar-values.net