1. Gold has been achieving new highs for months. Gold reached its highest historical level this winter, but Silver is still about 20% below its record high (winter 2008). Silver is set to rebound and those who hold silver or silver stocks will reap the rewards.
2. Gold/Silver Ratio: Historically, the gold/silver price ratio has been 1-to-16. Today it sits at 1–to-67. Silver is ready to catch up. We don’t expect it to rebound all the way to historical averages, but the current ratio is definitely higher than it should be, and when it comes down, silver prices will rise.
3. 2009 Supply Shortfall: In 2009 silver demand worldwide was 888 million ounces. Mining production was only 680 million ounces.
4. Silver Stockpiles Dwindling: Silver demand has been 156% higher than production annually for the past 19 years. Worldwide above-ground reserves are estimated at 140 million ounces. That is only a 4 month supply.
5. Chinese Demand: China Daily reports that demand has tripled to 2,600 tons. Silver is being marketed by the Chinese government as an investment to its citizens by state-sponsored television advertising. If only a small percentage of China’s 1.3 billion people buy silver, it will drive the price much higher.
6. Inflation: The values of Gold and Silver both increase as inflation rises. Demand for Gold and Silver also rise when inflation rises. With all the mass printing of dollars and other currencies around the world, the values of Gold and Silver will certainly increase.
US Stock market / Gold cycles 1850 - 2013
US Stock market / Gold cycles and bank failures 1928 - 2024
Why Silver is a better Investment than Gold in 2010
This is interesting article I received by email today.