Silver Bulls, Silver Bulls: It's Celebration Time for Ag


"Will silver's history repeat itself?"

In a chestnut shell: silver has become one of the strongest performing metals of 2010. To illustrate just how strong: the Grand Poobah of precious metals, Gold, soared 26% in the last year. That's grapes compared to silver's 70%-plus rally to a 30-year high over the same period.

And, according to the mainstream experts, there are three main factors that will contribute to the white metal's red hot winning streak:

Technological use: "Silver's. . . increasing demand for technology has helped drive prices higher. All those new TV's we're buying; every one of them has a unit of silver in it for reflective properties." (Financial Post)

Necessity premium: "Silver demand is largely price inelasticópeople will always buy it regardless of price." (Associated Press)

Demand outstrips supply: "The world supply of silver is being rapidly consumed. . . [leading to] the evaporation of stockpiles." (Commodity Online)

Sound familiar?

It should. In the latest Elliott Wave Theorist issue, EWI president Bob Prechter recalls the exact same bullish fundamentals in silver's DNA over 30 years ago, with four primary causes: significant developments in the electronics industry, soaring demand, a decline in market supplies and the halting of silver selling on behalf of the U.S. Treasury.

As Bob Prechter observes:

"Every one of these [causes] wasóand still isócorrect. If markets follow the rules of mechanics, silver would have risen to the moon for the stated reasons. But silver had already peaked at $50 per ounce two years prior to the book's publication. It did not bottom until 13 years later after falling an incredible 93% in value. . ."

The question isówill silver's history repeat itself now?

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe