Gold today is currently 55x greater than the Price of Silver, and in hard financial times of the past, this ratio has closed considerably closer to one in ten. Investing in Silver Bullion right now just may prove to be the opportunity of a lifetime presenting itself. Silver has now become the preferred choice of Investors, who would normally be buying Gold to hedge against the financial bad times as they manifest themselves.
On the supply front, according tothe WGC, “No single country supplies more than 14% ofglobal gold production”. While South Africa once dominated inproducing gold, the country now accounts for only 8% of the globalsupply. In 2010, China was the largest single countryproducer with a 13% share, followed by Australia (10%),United States (9%), and Russia (8%). Meanwhile,gold supply from scraps or recycled gold continues to be the modest.
MCXGOLD.995 04 February 2012 contract was trading atRs 27759.
A bout of volatility was seen in white metal silver too.Silver witnessed a roller coaster ride in 2011 and was caught in investors'wrong foot. Like Gold, silver also made its peak in 2011 and tested nearly $50in COMEX and above Rs 73000 in MCX. April and May were the most volatile monthfor silver in the year 2011; silver prices rose by 32% in April while fell 28% in May 2011 due to steep hike in margin byCOMEX and liquidation by some big players and hedge funds. Meanwhile the gold silver ratiodeclined steeply in the first half of 2011 from nearly 47 to 32 as silveroutperformed gold. However, the ratio again recovered during the second half ofthe year 2011 from 32 to above 47.
Gold, Silver and metals prices witnessed huge volatility throughout the year but investment demand continues to be robust for precious metals despite the sharp fall in Gold imports in Q4, Investment demand constituted 35% of gold demand while jewellery demand slipped due to prevailing higher prices leading to fall in gold imports to 878 tonnes compared to 958 tonnes in 2010.
Several positive factors have emerged in the Indian economy that could provide firm support for commodities in 2012. The Reserve Bank of India has halted the policy of raising key bank rates and RBI Governor has hinted that monetary easing could begin sometime on easing of food inflation to 0.42% while headline inflation has fallen to 9.75%. The HSBC Purchasing Managers Index has risen to 54.2, the highest level in six months while China’s PMI fell from 50.3 to 49 in November.
Commodity markets tumbled in the last trading week of 2011 at the Multi-Commodity Exchange (MCX) with Crude Oil being the only commodity to post marginal gains.
Gold and silver fell as investors continued to liquidate assets. Both precious metals had exhibited technical weakness. As such, increased technical selling may also have been a factor. Fundamentally, PM's remain bullish since the Euro crisis and US slowdown is not expected to be over with any time soon. As such, most investors see the current decline as a sharp correction and expect to buy in when time favors."Commodity trading tips" for today is so volatile.
Base metals remained in the red on weak Chinese PMI data. Also, trading remained muted since it was the last trading week of 2011. Copper hovers around the Rs 400 psychological level and the outlook warrants for a fall below 400 especially with indications from both China and Europe painting a disappointing economic outlook.
Crude oil was the only commodity that remained positive thanks to increasing tensions between Iran and the US. NYMEX WTI prices remained stubborn in the $100 territory despite base metals and precious metals declining. Natural Gas continued its weak performance.