Gold, Silver Surge to New Records
Source: ABC News, Lyneka Little (9/29/10)
"Silver hits 30-year high, and gold's at highest price ever recorded."
With stocks in the dumps and government deficits spiraling, Americans are increasingly turning their attention to silver and other precious metals (PMs).
Having more than doubled in price in two years, gold has prompted investors to load up on cheaper silver. Silver has gained 21% in price vs. gold this year.
"Some people are worried about the currency debasement and have done some research about the fundamentals of silver and. . .gold; and silver looks like a better deal," said The Morgan Report's David Morgan.
Silver's recent ascent has been more gradual than that in the '80s. "It's something that has been evolving for quite a few years," says David Smith, contributor The Morgan Report. "In the '80s, we had a bull market that sent silver to $50/oz., and then it went into a bear market after collapse. We moved into an accumulation phase and since that time silver and gold has been rising sharply."
Low interest rates are another factor in the rush to PMs, experts say. The average money market account nationwide pays just .69% interest, according to Bankrate.com. That's less than 1% annually.
For consumers, "putting money in the bank is no different from burying it in the ground. The interest rate is basically the same—zero. I think people put money in the bank just so they can write checks; there's no financial benefit to doing it," says Euro Pacific President Peter Schiff.
Can the gains in precious metals continue? "I think silver has gotten ahead of itself," Morgan says, ". . .if it moves that big of a percentage that quickly, it's almost always due a correction."