')Silver market sanity
With gold surging over the past 10 days, many are wondering why silver has not followed suit.
The gold to silver ration has climbed to around 46:1, up from a low in May of 32:1. What is
responsible for this sudden slowdown in the upward march of silver bullion? The blessing and
the curse of silver is the metal’s value in industrial production. Everything from touch screens
to nuclear fuel rods requires silver (see article 7 reasons to buy silver ). The industrial demand
of silver cannot be ignored and is a major driving force behind the recent explosion in silver
over the past two years.
With China on the verge of a recession and the U.S. on the verge of revisiting negative growth rates, industrial commodities are facing a demand shortage. We are already seeing evidence of this with the recent dropping oil prices. Some are predicting gas pump prices will be down $.50 by labor day. All this does not bode well for silver. Gold seems to be attracting the so called safe haven buying, and silver now appears over bought and much less attractive than it did six months ago. This does not mean it is time to start selling silver. Jim Rogers recently indicated he will not continue buying the metal, however is in no hurry to sell what he owns. The metal is still attractive as a tangible investment for value preservation in the face of uncertainty in the global economy. Expect the price to flat-line at around $35-$40 per ounce for the time being. Keep an eye on China for indications of any major movements in the coming months.
With China on the verge of a recession and the U.S. on the verge of revisiting negative growth rates, industrial commodities are facing a demand shortage. We are already seeing evidence of this with the recent dropping oil prices. Some are predicting gas pump prices will be down $.50 by labor day. All this does not bode well for silver. Gold seems to be attracting the so called safe haven buying, and silver now appears over bought and much less attractive than it did six months ago. This does not mean it is time to start selling silver. Jim Rogers recently indicated he will not continue buying the metal, however is in no hurry to sell what he owns. The metal is still attractive as a tangible investment for value preservation in the face of uncertainty in the global economy. Expect the price to flat-line at around $35-$40 per ounce for the time being. Keep an eye on China for indications of any major movements in the coming months.