Bleyer

Bleyer Year End Report

Published on December 23, 2011

Bleyer Year End Report – Gold and Silver Prices and Trends

We have had a very busy and exciting year here at Bleyer with an ever growing base of loyal and interesting customers.  We would like to thank you all for your custom and interest, for those of you yet to dip your toes into this market, and wish you a happy and prosperous 2012.

We travelled to several trade shows throughout the year, surprising opticians, doctors, pharmacists, vets and less so the property investors, who discovered the Bleyer Bullion stand at their industry conferences.  In June we sponsored the Young Farmers at the Devon County Show which was great fun.  We supported the ‘C Group’ (rehabilitation section of the Royal Marines) at the Mountbatten Dinner in October and have spoken at several investor forums.  In August we moved to our lovely new offices where we are well placed to service the growing demand for gold and silver investment in the South West.  Who'd have thought you could buy gold in Devon?

As we near the end of 2011 and look back at the year I thought it would be good to consider what the economists are saying about gold and silver and where the price is likely to go next year.  I trawled the internet for some words of wisdom but failed to find an impartial view.  I therefore decided not to join them and instead simply report on the past year so that you can see where we are now.

Personally I am rather fond of charts so here they are:

The gold price against Sterling trended on a steeper line for most of 2011.  However, at the beginning of December we saw a sharp correction taking the price back to the bottom of a longer term channel, still within the overall trend.  I also like to look at the 200 day moving average (shown in green) – these are often better indicators than straight lines.  In the case of gold the 200 dma seems to provide a fairly reliable support line with the price rarely ever dropping much below this point.

If your own conclusions about the state of the world, sovereign debt, inflation, economic unrest and stock market volatility lead you to believe that gold is where you want to put your money, then current price levels are looking rather attractive. 

Obviously, we at Bleyer Bullion cannot predict future prices and can only report on what we see.  We always remind our clients that we cannot offer advice on why now or later is a good time to buy, they must decide for themselves.  There is also still room for further corrections before the next major move up, but if your intention is to place a portion of your investment portfolio in gold you may want to get ready soon.  Sometimes it is best to take a longer term view anyway.  Physical metal is not the best investment if you want to make a quick buck.

This year our trade in silver has increased dramatically.  Many of our customers are absolutely ‘sold’ on silver and as with current gold prices, it looks fairly attractive right now.  Even taking account of VAT you get a lot more ounces for your money.  In Mike Maloney’s book Guide to Investing in Gold and Silver he predicts a massive increase in the price of silver in relation to gold.  He tells us that there is less silver than gold for investors to buy, yet the price ratio of silver to gold at today’s price is 55:1.  Silver is used more widely and is recycled less.  How long is it going to be before the price is reflected in the market? This is a question I get asked every day - I only wish I knew!

Anyway we can’t predict the future but here are the latest figures on gold and silver performance for the last 5 years to 22 December 2011

                                 *   Figures given in percentage change over period

For the sake of completeness here is the chart for the FTSE 100 over the same period.  Showing that even the volatility of silver doesn’t compare to that of stocks.