Silver Price: $20 in 2010?
Source: Silver Investing News, Melissa Pistilli (10/28/09)
"While gold is up 21% this year, silver has soared 56%."
Precious metal silver has been tracking gold's rally on an ever-weakening dollar. Despite today's dollar rebound, the downward pressure on the greenback is expected to continue as long as the Fed keeps up its low-interest rate, paper pumping scheme. Economic data on unemployment, manufacturing, consumer confidence, new home sales, etc. due out this week is likely to further influence the dollar's direction and that of precious metals.
Signs of global economic recovery are also having an effect on the dollar and precious metals prices and that trend is sure to continue.
"A lot of people are looking at the performance of the dollar," said Afshin Nabavi, a senior vice president at MKS Finance SA. "Traders are likely to buy on dips."
While gold is up 21% this year, silver has soared 56%. However, despite outperforming gold, silver still remains undervalued compared to its yellow cousin. As a recent Bloomberg article points out, when gold first hit $1,000 an ounce, silver was trading above $20 compared to the $17 range today.
Investment demand for silver is robust. ETF Securities has announced holdings in its silver ETF gained over 200,000 ounces (1%) Friday to a record 21.054 million ounces.
Let's not forget silver's industrial status and its close ties to copper. Silver has also benefitted from rising industrial demand along with copper, which reached a 13-month high on Monday, before reacting to the late dollar rally.
Of even more interest. . .the silver stock index has outperformed the S & P 500 nearly three to one.