Get that silver lining

INVESTING

Returns on silver from April 03 to March 05

Silver

Gold

Price
($/ounce)

Absolute
returns (%)

Price
($/ounce)

Absolute
return(%)

Period

April'03-Mar'04

4.40-8.40

90

330-432

30

May'04-Dec'04

5.40-8.15

50

372-456

23

May'04 -Mar'05

5.40-7.60

40

372-447

20

Source: Indiabullion.com

 In the current year, prices have been oscillating between $6.70 and $7.20, thus attracting investors giving the high speculative returns.  Based on the prices over six years from 1997 to 2003, if your portfolio investments contained only silver your absolute cumulative returns would have been 22.9 per cent. In comparison, gold would have fetched you slightly lower returns of 21.8 per cent.  All this withstanding, if you are considering taking the plunge into silver investments now, you should curtail your appetite a bit.  According to Krishna Nathani, head of research, Indiabullion.com, going by the present fundamentals, the levels to watch out for are $7.10 - $7.15. This would prove good for investors to liquidate in the short term.  With the announcement of the interest rate hike in the US by 25 basis points, prices have bounced back after touching a low of $6.78 in the spot market and $6.80.5 in the July contract on the Comex.  After touching $7.10, silver is expected to correct once again further to $6.20-$6.00 levels a month down. This is seen as a good level to invest in silver for the long-term once prices stabilise. Currently, the silver market continues to remain choppy following the Fed rate hike.  Vineet Rai, assistant vice-president, commodities, Angel Broking says,