Canadians Cashing in on Soaring Silver
Source: Canadian Press, Ross Marowits††(4/21/11)
"Silver's star run has Canadians running for the candlesticks."
With silver hitting a new 31-year high, the forgotten precious metal dubbed "poor man's gold" is gaining new credibility.
"It's certainly a good time to make some good money quickly because there's a lot of value," says Joseph Iorio of J & M Con & Jewelry Ltd.
He says most of the people coming to his Vancouver store these days are looking to unload silver instead of gold. Silver has actually outperformed the other precious metals.
Many analysts expect the price will surpass $50 and may not quickly collapse as it did 31 years ago when the price plummeted to $5.
"It looks as though the market wants to take it to $50 an ounce and it also appears that it may reach $50 an ounce quite quickly," said Patricia Mohr, an economics and commodity market specialist at Scotiabank.
Unlike the 1980 run-up that was caused by Hunt brothers efforts to corner the silver market, this year's increase is closely tied to weak currency and concerns about debt in the U.S. and so-called PIGS countries in Europe.
The price increase was aided by the dollar's swift fall after Standard & Poor's put the U.S. on credit watch.
Mohr has set a $50 target for silver, but was reluctant to say how high the price may go.
Canaccord Genuity believes it will peak at US$47.50 before dropping each year until reaching US$20 over the long term.
Mohr said sellers might want to act before factors such as a hike in interest rates in the U.S. likely causes silver to fall.