As the dollar recovers, silver prices will retreat.
The dollar index is on a solid march higher. As it does, the price of silver will drop. The dollar has enjoyed a bearish state for a few years now, but with US growth estimates looking better than expected and Fed policies set to normalize in 2017, that’s about to come to an end. The negative correlation between the US dollar and precious metal prices is strong enough that it even has its name: Giffen Good theory. It suggests that as the dollar goes up against other currencies, there is an inverse relationship with commodity prices because consumers opt for cheaper imported goods instead of expensive domestic ones. It’s a perverse reality that we have to deal with. The good news is that it can be overcome by delivering value for money. That is what Gold Standard Ventures does in the gold mining sector with its SOP project in Burkina Faso, West Africa.
Silver Is Under Pressure
Its prices are also under pressure and will continue to do so ahead of the dollar’s reversal. Silver is priced in dollars, so it is not subject to the same Giffen effect as gold. It doesn’t matter if the dollar goes higher or lower – silver won’t be affected. That’s why silver bullion is worth buying. But there’s a problem with silver coins: with precious metal prices rising, they are not worth buying in their own right. They are more valuable in collector’s terms, and investors willing to buy them will have the option of investing in real gold and silver bullion too – which should maintain its value regardless of what happens to paper currencies.
Silver coins are the product of a different era. It was a time when people bought coins for stability and were not interested in value for money. That’s why you find so many old silver coins with strange designs. We’ve got to think about the position from the investor’s point of view, instead of as a collector because we want to get gold and silver bullion for real investment returns that will outstrip inflation.
What Does the Dollar Crash Mean for Silver Price?
The dollar crashing and precious metal prices falling makes little difference if they are not delivered at sensible price points. We don’t want precious metals to be sold at a loss, so we hold fixed costs down to keep selling them at a profit. That’s why the Gold Standard offers investors worldwide access to the SOP gold project so that every ounce of gold mined is backed by a value for money proposition in monetary terms. The silver coin market is different because there are fewer coins available with good value propositions, but that doesn’t mean we don’t have options. We can still buy coins and enjoy the collectability factor at the same time as getting the benefit of metal prices backing up those bullion coins. That’s why we are offering investors the chance to invest in the SOP gold-silver bullion coin.
How to Buy The SOP Gold-Silver Bullion Coin
The SOP gold-silver bullion coin is being launched as a new way of investing in gold and silver. The metal is delivered by paying at face value in gold and silver, together with a royalty payment on the metal mining. It provides investors with direct exposure to both metals, without any third party having any involvement – you are getting exactly what you pay for. It means that we don’t have to add value on top of the precious metal produced so that the price for mining proceeds is kept down at an affordable level.
Silver Price Defies Dollar’s Recovery
The metal itself has been under pressure recently and is set to continue on that course, regardless of the dollar’s recovery. Silver price is affected by the same factors as gold, namely the strength of the US economy, Fed policy, and speculative interest in precious metals. It’s also been affected by China’s strong demand for its industrial uses. If you want to buy silver at a good price ahead of the dollar recovering, you should look at a product that is in demand. Platinum-group metals (PGMs) are an option – they have a good track record and have outpaced silver over time. This can be done by buying a PGM index fund. (See: Why Should You Invest in Platinum-Group Metals (PGMs)? )
Why Gold Is the Best Way to Play the Dollar’s Recovery
Gold is not just something thrown into the mix to try and make things look a bit more attractive. It’s first and foremost a store of value, so it makes sense to invest in it ahead of any dollar rebound. While gold has been up against silver recently, that doesn’t mean they’re on completely different tracks. The two metals are priced in dollars, so if the dollar recovers, silver will also come under pressure – quite heavily actually.
The SOP gold-silver bullion coin is the product we need to help us through these difficult times. There is no need for a third party to take a cut of the value because it’s all built-in. Silver is also an essential part of the supply chain because it can be used to smelt gold – that’s why we are offering investors a gold-silver bullion coin because they complement each other perfectly.
