Silver Could Be Pointing the Way Higher for Gold?

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In day-to-day trading, there have been several reports of fresh buying interest in silver, concentrated particularly in the U.S. More than once this year silver has been bought ahead of gold as speculators have anticipated price increases across the sector and looked for silver to gain more than gold.

Silver is a notoriously wayward metal. If there is one thing that is consistent about it, however, it is the fact that it is regularly more volatile than gold; as a result it will often be the leader when it comes to changes in investment or speculative patterns as market players look to play up their expectations for price performance. It does not always work successfully (no rule is incontrovertible), but the history is long enough for investors and speculators to give it a try from time to time and it rather looks as if it is happening again...

There is a cynical adage in the City of London, which runs as follows: "The bad news is that the price is down. The good news is that it fell in low volume". Recent falls in gold's price have generally been in low volume, exacerbated by technical selling orders and a clear reluctance on the part of would-be investors, at least at the professional level, but this is of cold comfort to some speculative holders, who are now becoming somewhat disenchanted with the metal, and on the expectation of more short-term strength in the dollar, sentiment in the market has been cautious to say the least...

In day-to-day trading, however, there have been several reports of fresh buying interest in silver, concentrated particularly in the United States. More than once this year silver has been bought ahead of gold as speculators have anticipated price increases across the sector and looked for silver to gain more than gold. This has not always been a successful venture, but it is a useful pointer to shifts in sentiment and silver's current outperformance may be signalling revived interest in gold.

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