RESEARCH & ANALYSIS

Silver is like gold in many ways. However, silver investors should be aware of three main differences from gold, explains Visual Capitalist in Part 3 of its Silver Series of infographics.

View Part 1 (The History of Silver) and Part 2 (Supply and Demand for Silver).

IN THE NEWS

A 'golden cross' has formed on spot gold's price chart. Experts say it signals an improving long-term outlook for the precious metal.

In technical analysis, a golden cross occurs when the shorter-term moving average rises above the longer term moving average.

The previous long-lasting golden cross on bullion charts was formed in February 2009; gold prices surged 11% in the following 11 sessions, and 103% over the next two years.

“These are important indicators of longer term technical strength and in conjunction with the recent positive technical picture are bullish,” GoldCore said, adding that silver is poised to complete its own golden cross in the coming days.

Full story: GoldCore, Reuters

RESEARCH & ANALYSIS

Here’s an interesting piece of research issued by Lloyds TSB Private Banking. The table shows the increase in price of 20 commodities between 2002 and 30 August 2012.

Silver prices rose in value by 572%, significantly greater than any of the other commodities tracked. Gold, at 428%, experienced the second highest increase.

At a sector level (Energy, Precious Metals, Base Metals and Agriculture), Precious Metals was the best performer, rising by 358% since 2002.

“Precious metals were the best performing commodity, with their perceived position as a safe haven investment reinforced over recent years amid the financial market turmoil,” Lloyds TSB said.

The data also shows the decline in commodity prices in the past year and its affect on gold and silver.

Looking forward, the bank concluded that commodity prices in general “are likely to be driven by the level of demand from emerging economies such as China and India."

IN THE NEWS

Over the past few weeks the US gold price has been climbing on worldwide central bank buying and expectations of a third round of Quantitative Easing in the United States, which chairman of the Federal Reserve Ben Bernanke, duly delivered Thursday by announcing another aggressive, bullion-friendly economic stimulus program. Gold futures added US$38.40, or 2.2%, to settle at US$1,772.10 an ounce in New York, the highest settlement since late February and the largest one-day percentage gain since late June. Silver futures also jumped Thursday, up 4.5% to US$34.778 an ounce, the biggest gain since June 29.

So what is Quantitative Easing? And will it help the US economy?

Short answer: It’s an unconventional monetary tool used by central banks to stimulate the economy.

Full story: Washington Post

IN THE NEWS

US gold prices traded higher on Wednesday, but not until after minutes from the U.S. central bank's August meeting were released which were interpreted as bullish for gold.

‘Parsing’ is the analysis of words for implications and deeper meaning and that’s what Eric Rosenbaum has been doing with the Fed’s latest notes – like this crunch sentence:

"Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.”

Despite uncovering the secret to parsing Fed speak, by the end of this tongue-in-cheek article he’s no more than “fairly" sure "many" Fed printing presses are in the process of warming up!

Full story: The Street

The price of platinum is at its highest in four months as labour unrest affects mines in South Africa, which hold around 80% of the world's reserves.

Gold futures for December delivery settled at US$1,640.50 an ounce prior to the release of the Federal Open Committee minutes. Silver rose 13 cents, or 0.4%, to US$29.56 an ounce. Platinum added US$18.70, or 1.2%, to US$1,526.50 an ounce, the metal’s highest settlement since May.

Full story: MarketWatch

WHAT OTHERS ARE THINKING

Plenty more being said about silver in the wake of yesterday’s Bloomberg report from those that have faith in silver.

Asked for his thoughts on the Kitco channel, David Morgan agreed silver was being held tightly by investors and that the precious metal is currently very undervalued. However, a lot of things are adding up that are favourable to silver: “I think the bottom is behind us… by the end of the year you could see $35 to $40 dollars quite easily.”

Video story: Kitco

Financial journalist Peter Cooper said silver was “astonishingly depressed” and argued that it currently had the edge on gold for precious metal investors. Like Morgan, Cooper listed the factors he saw favourable to silver while re-stating the confidence many have that both gold and silver will benefit “once central banks turn on the printing presses”.

Full story: SilverSeek

Meanwhile, chatter has grown that the Federal Open Market Committee meeting minutes to emerge next Wednesday could provide a monetary easing signal from US central bankers. Both metals profited in New York overnight with gold for December delivery settling up US$4.20 at US$1,606.60 an ounce and silver up about 5 cents to US$27.81 an ounce.

Full story: The Street