India encourages gold to the public

In a previous blog, a TV commercial was shown depicting the Chinese government has been encouraging its citizens to purchase gold and silver. Gold coins and bars are available at Chinese banks and post offices.

Indian consumers, already the world's largest purchasers of gold jewelry, are also joining the gold party, but this time as an investment. The government is encouraging purchases of gold coins through 2200 banks and post offices nationwide. The coins are available in various denominations and weightings.

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=91018&sn=Detail

Silver

While gold may receive most of the attention as an alternative investment, silver may offer the better value than its more infamous cousin. The gold/silver ratio is approximately 70:1 (gold is $950 and silver $14.50 currently), which makes silver historically cheap relative to gold.

Gold has maintained its monetary store of value spanning centuries, and most of its inventory above ground exists in the form of bullion, coins or jewelry. Silver on the other hand, has many industrial and scientific uses, including in electronics, batteries, solar panels, disinfectants, and antibiotics, among others. Hence, 97% of the silver that has ever been mined has been consumed, never again to be recycled. A shortage of silver appears to be more imminent than gold, as individuals recycle gold jewelry for cash.

Because silver on the COMEX exchange is a smaller market than gold (which is already much smaller than equities, bonds, and foreign currencies), it is easily manipulated. Hence, price increases in silver often lead price appreciation in gold.

Now that individual ownership of silver is encouraged to 1.2 billion Chinese, a rally in silver becomes even more probable.