Silver lining for cash-strapped consumers

IF you have flogged all the gold you have, then you could be in luck because cash-for-silver companies are expected to start sprouting up around the country.

Given the rising price of silver, Mark O’Byrne of GoldCore said we may see many “cash for gold” companies diversifying into silver.

“As long ago as 2003, we wrote in our market updates how we believed that gold and silver would reach their inflation adjusted highs of $2,400 an ounce and $150 an ounce respectively.

“We are more confident than ever that $150 an ounce silver will likely be reached in the coming years and if it does then you will likely see ads on TV with ‘cash for silver’ companies trying to entice the Irish public to sell the family silver because it is at record highs,” said Mr O’Byrne.

Some investment experts recommend investors have a diversification into silver. Mr O’Byrne said that while silver is more volatile than gold, it is less volatile than the ISEQ and “far less volatile” than individual Irish shares. “Besides less volatility, it has also outperformed the ISEQ and individual Irish shares over the long term — since silver became freely traded in 1971.”

Mr O’Byrne also said silver is interesting as it benefits from global economic growth due to very significant and increasing industrial demand but he said it is also a safe haven asset that protects from declining economic growth and inflation as was seen in the 1970s.

“Therefore, silver is likely to do well no matter what happens to the global economy and therefore merits a diversification in the majority of investment portfolios.”

Over the last few years many gold exchange outlets have popped up around Ireland, indicating a demand for the service. Gold trading rose 5% to an average of 19 million ounces a day in March, according to the London Bullion Market Association.

Silver trading increased 3.2% to an average of 145.7 million ounces a day. Last week cash silver climbed to the highest level since 1980.

The metal is the second-best performer over the past year on the UBS Bloomberg CMCI Index, lagging behind only cotton.