Silver Poised to Out Perform Gold??? Interesting Article

[golden silver]

I read an interesting article about Silver and Gold investment. These guys seem to know there stuff and there analysis seems to be dead on so far. They indicate that silver is lagging behind but will rallie and out perform gold. So keep a good eye on what gold is doing because silver is soon to follow. Here is a blurb from the Article. Below is the link to the PDF, Thanks and HH.

golden silver

"Nevertheless, it is signifi cant that once the ‘dust settles’
silver has then tended to outperform gold, arguably to
some extent ‘catching up’ with the yellow metal.
Careful analysis of the market conditions prevailing
at various points over the periods under review would
reveal a number of justifi cations to such price behavior. Strength in commodity prices and speculative interest
in the sector for instance had much to do with the
notable jump in silver prices compared to gold in the
second half of February and during early March last
year. Moreover, fi eld research confi rms that gold:silver
ratio trading has also at times helped silver investment. On the other hand, the massive liquidations that
followed the Lehman Brothers collapse combined with
growing recession fears had a particularly adverse
impact on silver investment, due to its lack of monetary
features compared to gold and the especially poor
outlook for demand from industrial consumers, which
account for a larger share of silver than gold demand.
The conclusion is that silver’s volatile nature and the
high involvement of speculators in the market could,
as a rule, result in greater net investment as well as
disinvestment than in gold and, therefore, larger price
swings in the white than the yellow metal. As was
mentioned earlier, silver usually underperforms gold
at the beginning of an up-leg and outperforms as the
rally matures. This is essentially what we have seen
in the fi rst few months of 2009, with silver generally
responding with a lag to renewed rallies in gold prices.
As indicated elsewhere in this report, this phenomenon
coupled with silver’s comparatively low starting point
at the beginning of the year could well result in silver
outperforming gold on an intra-year basis in 2009."


http://www.gfms.co.uk/Market Commentary/The Silver Investment Market.pdf

 

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[jim4silver]

I read an interesting article about Silver and Gold investment. These guys seem to know there stuff and there analysis seems to be dead on so far. They indicate that silver is lagging behind but will rallie and out perform gold. So keep a good eye on what gold is doing because silver is soon to follow. Here is a blurb from the Article. Below is the link to the PDF, Thanks and HH.

golden silver

"Nevertheless, it is signifi cant that once the ‘dust settles’
silver has then tended to outperform gold, arguably to
some extent ‘catching up’ with the yellow metal.
Careful analysis of the market conditions prevailing
at various points over the periods under review would
reveal a number of justifi cations to such price behavior. Strength in commodity prices and speculative interest
in the sector for instance had much to do with the
notable jump in silver prices compared to gold in the
second half of February and during early March last
year. Moreover, fi eld research confi rms that gold:silver
ratio trading has also at times helped silver investment. On the other hand, the massive liquidations that
followed the Lehman Brothers collapse combined with
growing recession fears had a particularly adverse
impact on silver investment, due to its lack of monetary
features compared to gold and the especially poor
outlook for demand from industrial consumers, which
account for a larger share of silver than gold demand.
The conclusion is that silver’s volatile nature and the
high involvement of speculators in the market could,
as a rule, result in greater net investment as well as
disinvestment than in gold and, therefore, larger price
swings in the white than the yellow metal. As was
mentioned earlier, silver usually underperforms gold
at the beginning of an up-leg and outperforms as the
rally matures. This is essentially what we have seen
in the fi rst few months of 2009, with silver generally
responding with a lag to renewed rallies in gold prices.
As indicated elsewhere in this report, this phenomenon
coupled with silver’s comparatively low starting point
at the beginning of the year could well result in silver
outperforming gold on an intra-year basis in 2009."


http://www.gfms.co.uk/Market Commentary/The Silver Investment Market.pdf

GS,

I hope silver rallies big time. But one fact some commentators like to throw around is how silver gained more than gold this past year percentage wise.

What they fail to mention is that the year before silver FELL more than gold percentage wise, and now it is still below where it was as far as the gold/silver ratio is concerned. Also, even though gold is breaking through all time nominal highs, silver is not near its recent high of 21 from 2008.

So yes, if you bought silver when it was at its low from 2008, you would be ahead percentage wise when compared to buying gold at that same time.

I think if we have a real big deflation situation and big depression, silver may not do as well as gold since it is used in industry so much. People with less money will be buying less stuff that uses silver. However, if silver starts being looked at as a monetary metal like gold, then it should surpass gold.

For some reason, even though silver has been used as money for centuries, the big money groups (central banks, hedge funds, institutional investors, etc) seem to look at silver more as an industrial metal and gold as a monetary metal right now.

I have stopped trying to use logic to predict what silver and gold will do, because just when you think you have it figured out the market seems to do the opposite. I am just holding both and hoping for the best.

I wouldn't mind seeing a big correction though so I can get some cheaper silver to add to the stash.

Jim