Sprott's Still Hot for Silver

Posted by - Tuesday, December 11th, 2012

Gold started the week out with a bit of momentum upwards after edging down last week. Experts are waiting to see how the FOMC meeting, U.S. trade balance, U.S. CPI and PPI, and EU Summit will affect bullion pricing as the week continues.

Meanwhile, billionaire Eric Sprott, CEO of Sprott Asset Management, has no doubts about where silver bullion is headed as the new year approaches. Holding 90% of his assets outside of Sprott Inc. shares, in gold and silver of course, Sprott maintains his claim that silver is the investment of the decade – beyond a shadow of a doubt.

In fact, Sprott asserts that silver is set to outperform gold, which isn't surprising since silver sales were 50 times higher than gold sales as of October 2012.

As silver becomes rarer than gold, its demand has increased tenfold. The Mint and miners alike will struggle to keep up with the insatiable investor demand as we launch into a year dominated by financial uncertainty in the fiscal cliff aftermath.

Last week Morgan Stanley also agreed precious metals were the best commodities to hedge the inevitable inflation heading our way.

Investors are running to safe havens in the last few weeks of 2012, but the gold rush is nothing like we've seen in the past. Instead, investors seem to have chosen a new favorite: silver bullion.

During the 2011 debt ceiling debate, gold surged to record levels. Now, silver's taking the spotlight. In the meantime, gold hovers around the same levels it was at last year.

Viewing the “gross impracticalities” pertaining to bond buying – 90-100% in some cases like Japan – Sprott says that only creates artificial interest rates. Sprott told Lauren Lyster with Capital Account, “It's not where bonds should be trading and you can't do it forever.”

All of these factors considered, Sprott says he's hedging with silver. He said he's happy more people aren't talking up silver the way he is – it allows him and other savvy investors to stock up while the price is still reasonable.

Sprott encourages people to check out the Mint website for details regarding this matter. According to statistics, the dollar amount invested in silver and gold coins is the same. For investment purposes, this means we're buying 53 times more silver than gold! The available silver for investment vs. gold for investment is a ratio of 7:1.

But people are buying it 50:1...

The investor can't buy at this rate for long before something big happens...

For an inside look at some of the best silver stocks available, take a look here.

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