Silver looks ready to rip

The Wall Street Journal has been taking an interest in silver, beginning one recent report by saying that what it calls “the poor man’s gold” was about to shine.

In fact, silver’s gains are outpacing those of gold these days - up 17 per cent in the past four weeks, up 24 per cent this year. So far.

At Friday’s close, an ounce of gold was worth 61 times that of the equivalent measure of silver.

Compare that to the 19th century ratios set by the US and France of gold being fixed at around 15 times the value of silver. In 2007, the ratio was 50:1.

The last big run for silver coincided with the huge surge in gold prices in 1979 and 1980. Silver’s high in 1978 was $US6.31/oz, then it went to $US34.45/oz in 1979 and burst out to soar to $US48.70/oz in 1980, but collapsing (along with gold) the next year, back to $US16.29/oz.

But here’s the thing: even at its maximum in 1980, the silver-gold ratio was 37.4:1. That suggests that, in this bull market for precious metals, silver is still lagging substantially with the concomitant potential for catching up to its historical relationship with the yellow metal.

Read the dull article at: Silver looks ready to rip