KUALA LUMPUR: More and more Malaysians are buying silver as a cheaper alternative to the more expensive gold for investment purposes these days, a trend that began at the end of 2010 when the silver price started rallying to a 30-year high.
Two people with wide knowledge of the silver market here say that the white metal will continue to attract investor attention locally as the silver price, now hovering around the US$30 (about RM91) per ounce level, has been forecast to rise next year.
With the gold price at around US$1,650 (about RM5,030) an ounce, they say silver often referred to as the poor man’s gold is not only a cheaper alternative to gold but also one whose price has greater potential to go even higher in the future.
They agree with international analysts that investors, worried about central bank and government spending policies worldwide, will continue to turn to these precious metals as a safe haven for investment purposes.
They add that silver’s many industrial uses is another reason why its price will trend higher in the future.
Daniel Foo, who shares silver investment information on his websitehttp://silverinmalaysia.com, said jewellery shops in Malaysia were now selling investment-grade silver bars, while more and more small-time traders were importing silver coins and bars from overseas and selling them online.
“The best evidence of the growing interest in silver investment in Malaysia is Maybank starting its Silver Investment Account. More banks are expected to follow suit,” said Foo, who has an e-book titled Practical Guide for Investing in Silver in Malaysia.
He said that about three to five years ago, no one talked about silver in Malaysia.
“Now, many websites, forums and Facebook group pages are selling and discussing silver investment. The potential for physical silver investment in Malaysia is enormous,” he noted.
Foo said while the gold price had increased by about 500%, the silver price had jumped about 650% over the past 10 years.
“Since 2008 to date, (November 2008 until November 2012), among all the investment options, silver has been the best performer, providing 200% in investment return while gold came second just slightly above 100%,” he said.
He said silver was being used, among others, in the electronics industry, solar panels, medical devices and in water purification.
“China, although the third-largest silver producer in the world, does not have enough and is importing the metal from other countries. It is encouraging its citizens to buy silver, while Indian corporations even buy silver as gifts for employees,” he said.
Jonathan Quek, a gold and silver strategist, said sales of silver coins and bars at silvermalaysia.com a site which deals in physical silver besides providing education in silver investment started picking up strongly from October 2010 onwards when the price started its rally from around US$24 to a 30-year high of over US$48 in late April 2011, before plunging nearly 35% in a fortnight due to tighter margin calls.
“From January to May 2011, many people started buying silver. When the price started plunging due to tighter margin calls, some of our investors panicked and sold silver because they thought it was a bubble while some investors started to accumulate,” he said, adding that the silver price was trading at a low of US$26 in 2011.
Quek, who is the founder and chief executive officer of silvermalaysia.com, said silvermalaysia had sold an average of 2,500 ounces of silver monthly this year.
He said his clients included young investors, including students, who bought small amounts of silver coins for investment.
“We expect more investors to buy silver next year because the price is expected to move even higher,” he said in an interview at his office in Mont Kiara.
Quek, who has written a book titled Why Gold? Why Silver? Why Now?,said he was encouraging people to buy the white metal more as insurance than investment.
He strongly believes, like many others globally, in a “financial armageddon” or a global financial collapse some time between 2015 and 2019 when he says money will become worthless.
He said this was when precious metals like gold and silver, which would shoot to US$5,000 and US$500 respectively, would be used, among others, to buy “food” and “property”.
Source by: The Star