The silver price dropped nearly 20% in just two days... and many Wall Street analysts were quick to downgrade their forecasts for the rest of 2013.

But we believe Wall Street analysts have grossly misinterpreted recent events.

And they have missed some extremely strong fundamentals regarding silver which makes the metal a fantastic investment today.

In fact, not only is this a good time to get your hands on silver... Recent events have made this possibly the greatest silver buying opportunity in history.

Let me explain...]]>

As we noted last week, all around the world the demand for physical precious metals has soared in the days following paper gold's price collapse. As the FT reports, from Shanghai and Hong Kong to India, one dealer noted, "Older members who have been in the business for 50 years haven’t seen such a thing." The feverish buying has left many of Hong K...

Interesting chart of the S&P vs. gold going back a few decades: Joe Weisenthal’s take: You can see that even with the recent upturn in stocks, relative to gold, gold has crushed stocks since 2000. Arguably, 2000 represented a peak in belief in the capabilities of humans. The internet inspired all kinds of crazy optimism [...]

Why the commodity's decline hasn't translated into deals on necklaces.

On the heels of Goldman Sachs advising clients to short gold and predicting an end of the year price target of $1,450, today acclaimed money manager Stephen Leeb told King World News this is just more mainstream desperate anti-gold propaganda. Below is what Leeb had to say in this powerful interview:

Gold is taking another beating today, and things are even rougher for related assets, like gold-mining stocks. Investors who bought a metal fund aiming for a hedge against reckless central banks are disappointed lately. SPDR Gold Trust (GLD) is down another 1.5% on Wednesday, while Market Vectors Gold Miners (GDX) and Market Vectors Junior Gold M...

By Tony Daltorio, Contributing Writer, Money Morning

One of things all investors should know for 2013 is how to invest in commodities, as the prices of many of these products head for huge gains.

One of the reasons they will soar is because institutional investors have quickly abandoned them in the current risk on/risk off investment climate. There is right now roughly $424 billion invested in commodities, but that is a mere fraction of 1% of all global investment assets.

When all that money comes pouring back in, those commodity-related investments will skyrocket.

The few institutions that jumped into the market were disappointed because the commodities "super-cycle" did not generate spectacular gains for them in a year or two. Also, with inflation appearing to be nonexistent in the government-reported numbers, institutions are bailing on commodities.

For example, the giant California state pension fund Calpers last month slashed its meager 1.5% allocation to commodities to a miniscule 0.6%. It moved the money into the already bloated U.S. bond market, adding to its overweight position.

Just because institutions are short-sighted doesn't mean you should be. Keeping a percentage of your portfolio invested in commodities should help smooth out the effects of volatility.

With more and more central banks pursuing easy-money policies, currencies will fall and commodities will be more valuable to investors.

Also, keep in mind that emerging markets have not fallen off the Earth. They are still growing rapidly, and have a hunger for all sorts of commodities.

How to Invest in Commodities

There are two broad categories of commodities: hard and soft.

Hard commodities cover everything in the metals and energy areas including oil, natural gas, copper, nickel, gold and silver. Soft commodities include all the commodities that are edible including all of the grains, cattle, pork bellies, sugar, coffee, cocoa and orange juice. Cotton too is thought of as a soft commodity.

There are three ways investors can gain exposure:

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Silver prices have slid since the start of 2013, and the white metal's down nearly 9% so far this year. Silver, which had hit a record high of $49.79 an ounce in April 2011, was trading for $29.36 Tuesday afternoon.

That leaves plenty of room for prices to climb - and plenty of profit for investors who buy on the dips.

Money Morning Global Resources Specialist Peter Krauth said recent weakness in gold and silver prices "has created a great opportunity for true contrarian investors" to add to their positions.

"We may not have hit the absolute near-term bottom, but I think the odds are good that we're pretty close," Krauth said as the sell-off accelerated in February.

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The demand for physical silver from small investors in the form of coins is really remarkable. A record 7.5 million ounces of silver coins were sold in January.

In mid-January, the U.S. Mint was forced to announce that it was forced to suspend sales of the 1-ounce American Eagle silver bullion coins because, after just two weeks, it was sold out of its entire inventory.

Silver bullion coin sales were strong going into the close of last year as investors became concerned over the state of the U.S. economy with Congress debating the fiscal cliff and the debt ceiling.

UBS noted, "With the U.S. Mint reporting notable sales volumes last November - when the U.S. held elections - and again this month when U.S. fiscal issues are at the forefront, it is easy to infer that some element of the 'fear trade' may be at play."

UBS was skeptical of the fear trade, but added "Nevertheless, it is important to keep an eye on U.S. coin sales in the coming months to see if volumes remain elevated as the debt ceiling showdown plays out."

Famous investor Jim Rogers is also a fan of buying silver coins.

"You can't get [silver coins]. They sell out," Rogers, who owns a rare 2013 silver coin, said on Yahoo! Finance's"The Daily Ticker" earlier this month. "Several mints have run out of coins because everybody's worried about the future of the world."

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• The continued high reading in the gold/silver ratio, which indicates silver is undervalued relative to gold based on historical norms.
• The prospect that four more years of President Barack Obama's policies will prove inflationary, devaluing the U.S. dollar and thus boosting the prices of hard assets like the precious metals.
• Growing investment demand as more fund managers purchase the metal to back a growing number of new exchange-traded fund (ETF) offerings.
• A continuing increase in industrial demand for silver, which is used in everything from solar-power generation and water purification to hygiene and specialized medicine.

How to Buy Silver

Speculative traders’ bets on gold and silver fell to the lowest level since December 2008 last week, according to Friday’s Commodity Futures Trading Commission data. Managed money funds and hedge funds’ net long gold positions fell 23% for the week ending July 24. QE-3, hooey? No. This reading pre-dates European Central Bank chief Mario Drag...

Insights on the Commodities Bull Market