OTCPK:BELGF - Post by User
Post by
my2bitson Jan 18, 2007 6:51pm
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Post# 12046383
Extract from an article on silver
Extract from an article on silver
Silver Scarcity Play: Better than Gold?
(Extract from an article by Vital Resource Investor).
Mention precious metals and gold springs to mind. But when the precious metals run, silver ultimately tends to rise more than gold. In fact, silver usually climbs twice as high as gold during a bull market in precious metals. True to form, it’s doing twice as well this time, too.
Unlike gold, silver has a host of critical industrial uses. So silver users can’t simply stop buying when prices get high. They have to keep on buying. And silver inventories are critically low right now.
Its value has more than doubled in the past 12 months...and the last time it started a run-up in conditions like this, it soared 1,435%.
Here’s why I think it has a long way to go yet. Gold has historically traded at around 16 times the price of silver. Logical enough, since silver is about 16 times more common than gold. That means with gold at $650, silver should cost around $41 ($650 ÷ $16). But silver now trades at $13 an ounce. That means silver will give you a triple from here if historical norms hold.
I can’t promise you that silver will go back to its historical value. But it has happened almost every time faith in the dollar is weakening...and crisis lurks.