It's Raining: Buy Silver
Source: MetalMiner, Stuart Burns (7/6/10)
"India's high gold prices have encouraged a switch to silver. . ."
Silver returns tend to be more volatile than gold because 50% of silver consumption is industrial; thus, price volatility is closer to base than precious metals. The volatility in price is exacerbated by the rising consumption of silver in ETFs—particularly metal-backed, silver-only ETFs.
While mine supply has increased in recent years, government stockpile and scrap recycling supply has decreased, reducing supply sources. At the same time, coin demand has increased. Although industrial consumption dropped in crisis-hit 2009, it's coming back now—and with rising Indian jewelry consumption, suggests the current strong price levels may not be misplaced.
GFMS, the world's leading precious metals consultancy, says in its Silver Survey 2010, that even while silver broadly shadows gold, chances are that this year it will outperform the yellow metal. GFMS thinks there could be a more decisive silver price breakout before the year ends to take it past the London high of $20.98/oz. set in 2008.