What Will Happen To Gold Prices And Silver Prices When This Huge Player Steps Up To The Plate?

March 11, 2011 - PRLog -- Gold prices and silver prices ought to benefit significantly from the news of the questionable values of US dollars. Look for large increases within the costs for silver and gold coming soon. This makes silver dollar values look like an excellent investment now. Purchase silver! Purchase Gold! Visit http://silver-dollar-values.com for more silver and gold tips.

You by now know about the fundamental factors for owning gold and silver for currency protection, inflation hedge, store of value, calamity insurance, many of which in turn are becoming common knowledge even in popular articles. Toss in the supply and demand imbalance, and you've got the fundamental arguments for why one ought to keep gold for the foreseen future.

Every one of these elements stay extremely bullish, in spite of gold’s 450% rise over the past decade. No, it is not too late to purchase, particularly in the event you do not own a meaningful quantity; and yes, I'm convinced the cost is headed a lot higher, irrespective of the corrections we'll inevitably see. Each of the previously mentioned catalysts will push gold’s price higher and higher within the years ahead, particularly the currency problems. Visit http://silver-dollar-values.net for more silver and gold tips.

But there's an additional driver of the cost that escapes numerous gold watchers and definitely the mainstream media. And I'm convinced that as soon as this sleeping giant awakens, it could fire up the gold marketplace like absolutely nothing we have ever witnessed.

The funds management business handles the majority of the world’s riches. These institutions consist of insurance businesses, hedge funds, mutual funds, sovereign wealth funds, etc. However the elephant in the place is pension funds. They are institutions that offer retirement income for both public as well as private plans.

Worldwide pension assets are projected to be $31.1 trillion. No, that's not a misprint. It's much more than twice the dimension of last year’s GDP within the U.S. of $14.7 trillion.

Now here is the enjoyable part. Let’s point out fund managers, as a group, understand that bonds, equities, and real estate have turned out to be poor or risky investments and so determine to improve their allocation to the gold marketplace. In the event that they doubled their direct exposure to gold and gold stocks - which might still represent only 0.6% of their overall assets - it might amount to $93.3 billion in new acquisitions.

Just how much is that? The investments of GLD total $55.2 billion, so this quantity of cash is 1.7 times larger than the biggest gold ETF. SLV, the most significant silver ETF, has net property of $9.3 billion, only one-tenth of that additional allocation.

The marketplace cap of the whole sector of gold shares (producers only) is about $234 billion. The gold business might see a 40% increase in new cash to the sector. Its marketplace cap would increase two times if pension organizations allocated just 1.2% of their resources to it. Visit http://silver-dollar-values.com for more silver and gold tips.

However what if currency problems spiral spinning out of control? Let's say bonds decline and die? Imagine if real estate takes a decade to recover? What if rising cost of living becomes a barking dog like it has each and every other time in history whenever governments have watered down their currency to this level? In the event that these funds set aside just 5% of their resources to gold - which would amount to $1.5 trillion - it would certainly overwhelm the system as well as rocket costs skyward.

And also let’s not forget about that this is just one class of establishment. Insurance businesses have about $18.7 trillion in property. Hedge funds handle approximately $1.7 trillion. Sovereign wealth funds manage $3.8 trillion. Then you will find mutual funds, ETFs, private equity funds, as well as private wealth funds. Toss in millions of retail investors worldwide like you and me and we are looking at $100 trillion of feasible new invested funds.

Sovereign debt dangers are not even close to over, the U.S. dollar along with other currencies will lose considerably much more value against gold, interest rates will most definitely rise within the years ahead, and inflation is just becoming started. These kinds of forces are in place and building, and if there’s a thinking shift in how these kinds of managers view gold, watch out!

Because as soon as fund managers get into the gold marketplace in mass, this very small sector will catch on fire with blazing speed.

My guidance would be to not just hope you are able to jump in as soon as these players get into the precious metals marketplaces, but to lay claim to your seat throughout the relative tranquility of this month's level costs. Perhaps now is the time for you also to think about your investment portfolio and purchase gold and purchase silver as a safe haven in these periods of uncertainty in the political and monetary areas. Silver dollar coins make an excellent investment that you are able to personally hold and maintain safe.

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