Build your professional network on facebook via our app Go to app
 
 
 

Is there a bubble building up in silver prices?

Created by : Esha Johar, Risk Analyst, Irevna  | 04 19 2011 04:47:51 +0000
Industry : Investment BankingFunctional Area : India(Markets)
Keywords : indian markets bubble building silver prices bubble burst gold silver prices
Activity:  329 views;  last activity : 04 22 2011 13:38:40 +0000

As long as there have been markets, there have been bubbles. Most bubbles have their genesis in a kernel of truth. In other words, at the heart of most bubbles is a perfectly sensible story.

The bubble builds as the market provides positive reinforcement to some investors and businesses for irrational or ill-thought out actions.  A critical component of bubbles building is the propagation of the news of the success to other investors in the market, who on hearing the news, also try to partake in the bubble. In the process, they push prices up and provide even more success stories that can be used to attract more investors, thus providing the basis for a self-fulfilling prophecy.

IS IT THE CASE WITH SILVER AS WELL ?

http://www.vectorstock.com/composite/36273/bubble-clear-silver-vector.jpg

  
 Refer 1174
Share
 
 
  Rate : 
 
 
Yes Vs No
13
 
 
 
 
6
7
5
Support   Support
Top Argument
2
0

As for now it seems to be so. A bubble which will burst and leave us no where.. Be sensible while you invest. think with logic not with greed..
By Esha Johar, Risk Analyst, Irevna  04 19 2011 04:47:51 +0000
 
Top Argument
1
0
11 important Reasons why Silver trade will out perform Gold 1) Shift in Monetary reserve policy to Gold & silver from Dollars 2) Commodities are in a secular long term bull market, More so Gold, Silver Individuals, Central banks & governments across the globe are shifting their reserves in to tangible assets like Gold & Silver 3) Silver production deficit for straight 15 years now! From last 15 years silver usage in Electronic & Electrical industry has hot up many fold & still the supplies are no where near demand 4) Gold demand almost near to its supply – Silver down from 2 billion ounces to 367 million ounces / annum 2 billion ounces in 1990 & still the same in 2010 – Silver 2 billion ounces in 1990 & 367 million ounces in 2010 in-spite of silver being mined 8 times more than gold ! 5) Silver is severely under valued Historically silver is greatly undervalued compared to gold, silver prices have not kept rising to their historic high’s of 52$/oZ even when adjusted against inflation for several decades now 6) Gold silver ratio is unrealistic & is set to rise Current Gold silver ratio is @ 1/45 which experts like UBS, Berkshire Hathway, and David Morgan Etc believe in the next decade the ratio will come down to between 1/16-1/10 of the gold prices 7) Silvers real value is far more than what it really is today Purchasing power of dollar through 1913-2010 has almost gone down 95% as a result dollar denominated ratio for gold & silver has disproportionately grown hence the rise in Gold & silver prices, but silver is far too behind even @ of $ 29/oZ 8) Silver yet to reach its peak price: Silver’s historic high was $ 52 / oZ during 1980, if this price were to be adjusted against inflation over these 30 years; silver price should be $ 153/ oZ ! @ $ 29 current market price, prices of silver has a long way to go!! 9) 51 country heads across Europe & South American counties have agreed to Make silver as their Money: Economic crisis across Europe & USA has made several Country heads Opt for time tested real money reserves in the form of Gold & Silver 10) Ratio of silver recycling is far too less compared to Gold: Digital technology is Creating unprecedented demand for silver which cannot be recycled, almost all digital Technology products use silver as one of the main component. 11) China factor: China is discreetly converting its several 100 billions of dollars In to Gold & Silver & nearly 50% of silver is consumed by its industries While there are very few opportunities to invest in Silver through mutual funds. For Gold you have gold ETFs and also Funds like Reliance Gold Savings Fund, etc, but for silver there is virtually no option. Birla Precious Metal Fund is one option where you can get a Silver Exposure. More options are sure to come, especially in the wake of the sizzling rise in Silver price.
By Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  04 19 2011 18:50:44 +0000
0
0
i agree with your pointofview
By Abhishek Upadhyay, Accounts Executive/Accountant, Ashirwad Marketing  | 04 20 2011 05:35:10 +0000
0
0
kharbooze ko dekhkar kharbooza rang badalta hai....yahan sone ko dekhkar chandi rang badal rahi hai
By mohd shariq, asst.prof.(mass communication), ims,dehradun  | 04 20 2011 04:44:33 +0000
0
0
yes
By amit urmaliya, Relationship Manager, Leading bank  | 04 19 2011 17:00:34 +0000
0
0

Esha I agree with your point of view.
By Rathin Deb, Freelance Retail Consultant  | 04 19 2011 12:33:31 +0000
0
0

Every precious metal has a huge impact considering the global market, Considering the white and yellow metal, it is on the higher side, Stock market is down at this moment however, money seems to be moving at a slow speed, the market movers are waiting for the election to get over in down south followed by East and other places. With considerable amount of man power recession it should make a good impact on the nasdaq and also on london stock exchange who fixes up on the price, as of now bubble is building up in silver price, it will be bad in few days from now.
By R.Hariharan Subramaniam, Account Director, (Strategy and Planing), LIVEPOT QATAR, AL Wakhra  | 04 19 2011 11:00:27 +0000
0
0
There is always a stage in speculative trades , when the fact completely hide in the cloud of greed. All the bubble represent is the greed of speculators. I support your view
By taxworry , Confidential  | 04 19 2011 10:34:16 +0000
0
0
demand and supply will deide the value of the product hence the usage of sliver in many forms increased people are investing more money towards sliver which is more secure
By cmsrinivas , SalesManager-autoloans NBFC  | 04 22 2011 13:38:40 +0000
0
0
A very good explanation from Mr. Vipin Bhasin providing every detail about the surge in Silver prices. The first point he pointed out is very valid. There is a shift in monetary reserve policy globally considering the economic down turn of USA. Nobody will naturally invest in a currency whose future is blinking. This shift is going towards Gold and Silver. But I have a doubt about how unrealistic the Gold and Silver price ratio. It seems that the Silver is going to cross the One lakh bar within a short span of time. Its going to settle around one lakh per kg. One can invest on silver till it reaches the barring.
By Srinivas suravajhala, Asst. Manager.  | 04 20 2011 06:55:11 +0000
0
0
Not as of now. People are just diversifying their investments. Earlier it was gold. Since the price of gold has touched astronomical levels, people are going for Silver. The demand for precious metals will always be there as long as the US dollar is the only strong currency in the world used for international settlments.
By Raju V P, Senior Manager, an International Bank  | 04 19 2011 08:39:14 +0000
0
0
One cannot be sure about bubbles as they form. It is like a 'spring balance', as long as the spring is in the susceptible area there won't be any bursing, when it crosses to the dissipation state we confirm burst. Silver and gold earned the highest after the turmoil it seems, so this must still be in the susceptible levels. One has to develope some sort of 'logistic equation' for this and see how it happens daily on prices and then we get an idea if it is some indications for the future state of the global economy. One has to plot the teturns and see if there is point of rupture somewhere in future using methods invented by people like Weistrass and so on. Otherwise the bubbles are unpredictable.
By Mathew Cherian, Research Associate/Analyst, Western Michigan University  | 04 19 2011 08:26:34 +0000
Argue for "Yes"
Argue for "No"
 Found the debate "Is there a bubble building up in silver prices?"  interesting ?  Suggest to your connections and communities  
Leaders in Social Media Recruitment
Openings for SAP ABap with Web DynPro Professionals
Solution Engineers Microsoft Platform Jobs at Hyderabad
PLD Design Engineer Jobs at Bangalore
Viewers also viewed
" Retail chain Shoppers Stop today said it may increase prices of its products by 6-7 per cent...
 
1311 referals 51 arguments, 871 views
We see sales for branded items going on and on all round the year. The Christmas sale followed...
 
1604 referals 23 arguments, 371 views
Your brand image makes people think in a certain way about you or your business. Having a...
 
1078 referals 8 votes, 1139 views
more...  
Recent Knowledge (5)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 107 views
These days as I switch on the tv or radio or look at a hoarding I do feel that power of ads I...
 
3004 referals 23 arguments, 502 views
C vs B
 
0 referals 3 arguments, 51 views
more...  
Sponsored Jobs
More From Author
A set of people believe that dreams change and hence buying a dream home just increases the maintenance cost whereas renting one is relatively better option. In today's world where the property rates are increasing like nothing else. Which...
JV needs more dedication and yes sir back stabbing approach kills it all. The end result of a well set JV with values gives more value.
No we are not.. not right now. We are still in recovery stage and this time I do not think the same mistake will be repeated. Having tough time is one thing and going back to recession is totally different, we cannot mix them.
more...