Gold and Silver Star in Mixed Bag for Precious Metals

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...silver has shot up almost 41 percent from its January low point of $14.93 an ounce.

Is the gold genie out of the bottle? And will silver continue to dominate the price increase phenomenon for precious metals? Why are platinum group metals prices slipping as gold and silver rise? These are all questions the precious metals investor will be asking and we'll deal with them in order...

Coupled with continuing huge uncertainties in the financial sector, of which the Bear Stearns bailout is but the latest element, and a falling stock market, conditions are ripe for an ongoing increase in the gold price, both as a recognition of the declining dollar and a protection against loss of value in more traditional investment sectors.

...gold has risen a little under 23 percent from its January low this year - quite an impressive performance until one looks at silver which has shot up almost 41 percent from its January low point of $14.93 an ounce. Silver investors are thus in an even better position than those who trust in gold to preserve the value of their investments. Can this percentage rise advantage of silver over gold persist?

Perhaps not, although the fundamentals for silver are looking better all the time. The silver price had been left behind a little in the latter part of 2007, apart from a nice run up to over $15 an ounce in November, but this didn't last. Silver is more ‘commodity' driven than gold currently as its monetary element has gradually been replaced, although long term silver bulls like David Morgan would perhaps beg to differ. But industrial growth in the use of silver is occurring, while at the same time it also tends to be dragged upwards by a traditional relationship with gold such as that as long as gold continues to rise, silver will almost certainly do so too and with an ounce of silver only worth around 2 percent of an ounce of gold there remains a leverage element which could still work in silver's favour...

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