Deborah Baratz: It’s been a volatile week, but silver prices are expected to rise in U.S. President Barack Obama’s second term.
Silver futures prices ended the week with a 5.7% gain. Silver for December delivery rose 36 cents, or 1.1%, on Friday to settle at $32.60 an ounce.
With the fiscal cliff the next major topic for Washington to tackle, investors are pushing into safe havens like silver and gold to balance market uncertainty.
Also with President Obama in office, U.S. Federal Reserve Chairman Ben Bernanke and his easy money policies will hurt U.S. dollar value for at least another year.
“Since Obama was elected in 2008, gold is up 116% and silver us up a whopping 198%,” said Money Morning Global Resources Specialist Peter Krauth. “Honestly, I expect a similar performance could well be enjoyed over the next four years.”
With that in mind, here are three ways to invest in silver with prices on the rise.
Invest in Silver with Silver Wheaton
Silver Wheaton Corp. (NYSE:SLW) released its third quarter earnings report on Nov. 5, posting a 26% increase in its attributable silver equivalent production to 7.7 million ounces in the quarter.
But its profit fell 11% to $119.7 million (34 cents per share) and revenue dropped 13% to $185.2 million thanks to a 14% dip in silver prices from the previous year.
Looking ahead to this quarter’s numbers, Silver Wheaton CEO Randy Smallwood told Bloomberg News, “We’ve already seen a bunch of shipments from these mines where inventory did build up.” He added that the fourth quarter is “always a good one in terms of inventory” with mining companies pushing sales to improve their year-end earnings.
The company also declared a 7 cent dividend, a 30% drop from the prior quarter, but according to Dan Rollins, a RBC Capital Markets analyst, the dividend fall is “expected to be temporary” and the company could declare a 12 cent dividend in the first quarter and may close 2012 on a “strong note,” according to Bloomberg.
Year-to-date, Silver Wheaton is up 40.19%.
Invest in Silver with Pan American Silver Corp.
Pan American Silver Corp. (NASDAQ:PAAS), a silver-mining company, reported a 13% increase in third-quarter silver output with 6.3 million from the previous year on Thursday thanks to its recently-acquired Mexico Dolores mine.
For the year’s first nine months, silver output hit 18.2 million ounces and the company said it’s still on track to meet its 2012 full-year guidance of 24.25 million to 25.5 million ounces.
Pan American’s quarterly adjusted net earnings were $37.6 million ($0.25 per share) on $251.8 million in record revenues but this is a decline from the previous year’s $51.5 million ($0.48 per share).
The company also announced a fourth-quarter dividend of 5 cents per common share to be distributed in early December.
Geoff Burns, president and chief executive officer in a conference call told Kitco, “I look forward to 2013, when we will again look at materially increasing our dividend and sharing even more of our success directly with our shareholders.”
In the last six months, the stock is up 20.07%.
Invest in Silver with iShares Silver Trust
iShares Silver Trust ETF (NYSEARCA:SLV), which tracks physical silver, recently hit the $10 billion mark in assets as it trades more than 10 million times daily, reported ETF Daily.
What’s interesting about SLV is the fund will take its managed money and purchase silver bars kept in London vaults.
It also appeals to options traders.
Recently as silver prices declined after reaching highs in September, SLV is at its $30 support mark, and this means buyers.
With buying comes higher prices. In the last five trading days, the ETF is up 5.28% and year-to-date, it has increased 17.04%.
These numbers are higher than silver futures and with this ETF, you can have a sense of physically owning silver while still having liquidity.
Look for silver prices to remain volatile but the outlook is good with lots of opportunities to participate in the ride.
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