Thursday, February 9, 2012

Silver: The Shiny Bastard

Using some of the research from our friend SRSRocco is his latest article The Coming Paradigm Shift in Silver, and Alf Field's TA call for silver to run to $158 on this leg, VRonsky from discusses why silver is about to lose its bastard status as unwanted step-child to gold.

silver demand exceeds mine outputWithout question, silver at a mere $34 (February 2, 2012) is grossly under-valued vis-à-vis other commodity prices and compared to its Inflation Adjusted value of $141/oz. Indeed silver is the bastard child of the commodities family… at least until now.

This Will Change Starting in 2012

There are a number of factors, which will contribute to silver's accelerated price rise in 2012 and for years to come.

Growing Consumption
Demand for silver is increasing tremendously through industrial usage, medical applications and especially speculative investments.

Increasing Media Attention
Heretofore silver has not enjoyed the media hoopla that blesses gold or crude oil. That is about to change as investors discover that silver's value has increased 150% during the past three years (well above gold's and CCI performance in the same time frame). See Performance chart below.

silver demand exceeds mine output

Silver Demand Exceeds Mine Production

The growing demand/production deficits will indubitably fuel silver to ever record highs in 2012 and beyond per silver demand exceeds mine output chart:

How China Will Drive Silver To $250/oz.

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