The Gold Economy

Although gold continues to grab most of the attention in the precious metal world, its less glamorous sister, silver, may be more appealing and for good reason.

First off, silver has many more uses than gold does. It is used for numerous industrial purposes and nearly 55% of total silver fabrication is used for industrial purposes. Silver is commonly used in the electronics space and can be found in plasma display panels and printed circuit boards, as well as in the lining of refrigerators, for food storage containers and for water purification. Additionally, the metal can be used as

With consumer confidence plunging and governments around the world racking up seemingly unpayable bills, many investors have sought refuge outside of fiat currencies in order to help protect some of their assets from the ravages of inflation which is sure to come eventually. Almost by default, investors have piled into gold which has seen its price soar to $1250/oz. before dropping back to the $1160/oz. level it is at currently. This recent pullback has left gold investors will an interesting dilemma; buy more assuming that the economy or the dollar collapse, or sell as the economy picks back up

I have written extensively about the extremely strong relationship (.pdf) between gold ETF holdings and gold prices. For much of this year, that relationship benefitted gold, as both holdings and prices relentlessly increased. The trend has obviously reversed over the past month, but interestingly, prices led the decline in holdings.

It is important to remember that gold investors are not a homogenous group. There are gold bugs— perennial bulls who most likely hold physical gold rather than shares in ETFs, there are momentum traders who sell on the first sign of weakness, and then there is

By Brad Zigler

Real-time Monetary Inflation (last 12 months): -1.6%

After the break in gold prices this month, a fair amount of questions popped up ‘round the water cooler about the money flows into and out of the iShares Silver Trust (SLV). The queries were prompted by the dissonance between the money flows and share prices in the SPDR Gold Shares Trust (GLD) examined in a preceding column (see “Gold’s Waning Strength“).

Well, the money flows were, and are, different. There hasn’t been much dissociation in SLV’s money