Should gold and silver pace each other?

Duer 157099

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Thu May-06-10 04:37 PM
Original message

Should gold and silver pace each other?

Just going from memory, when I last really paid attention, back around 2000, gold was around $250 and silver was around $5.

Now I see that silver had about tripled, but gold has increased some 5x.

Is there any reason to believe that they ought to increase together at the same percentage, or, is it a given that gold will always outperform silver?

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slackmaster

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Thu May-06-10 04:40 PM
Response to Original message

1. Silver has a broader range of industrial uses. The price of gold is driven more by speculation.

I used to use the ratio of their prices as an indicator of which one to buy or sell at a given time. With the demise of film photography and the development of financial instruments that allow investing in metals without actually buying any metal, that ratio has become IMO less meaningful.

Both metals are priced far above what it actually costs to mine and refine them.

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Brother Buzz

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Thu May-06-10 04:45 PM
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2. There is a lot of silver ore waiting to be mined

Lots of low grade ore, that is, that is profitable to process only when the price of silver is high. silver prices spikes for just a short time until the market corrects it. This is what stung the Hunt brothers in spades.

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Speck Tater

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Thu May-06-10 05:12 PM
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3. There used to be a HUGE demand for silver in photographic films.

Now with digital cameras, not so much demand any more.

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Mon May 13th 2024, 02:11 AM
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