Analysts Believe Gold And Silver Ready To Rise

February 8, 2010 – Many analysts will calmly state that gold and silver have been in a bull market for years, pointing to nine years of gains by gold and impressive increases over the past forty years for proof. Although nothing lasts forever, many analysts see current conditions and believe that gold and silver prices are ready to rise again.

Prices for both metals have corrected over the past two months, with gold settling just above $1,060 per ounce and silver slightly over $15 per ounce. With both having solid fundamentals, the prevailing opinion is that they have found the bottom of their correction and are preparing for a rally. Gold has a number of supporting reasons for increase and with the Gold Silver Ratio favoring silver; gold’s rationale is even stronger in its support of silver. These factors suggesting price increases include:

• Strong purchasing by central banks

• Gold and silver’s ability to serve as an inflation hedge

• Silver has never beaten its historical $50 per ounce price of 1980

• Gold and silver protect against fiat currencies

• Gold has not beaten its inflation-adjusted high of $2,200 from 1980

Among the most active buyers recently, central banks, exchange-traded funds and institutional buyers have been buying while smaller investors sell. This suggests an underlying strength is seen by these professionals. In addition, neither gold nor silver have hit their ceiling; gold has barely gotten within $1,000 of its $2,200 inflation-adjusted high and silver hasn’t hit its historical high straight up, let alone an adjusted high. Both metals still have a lot of leg in them.

Finally, most investors realize that gold and silver are hedges against failing currencies, inflation and floundering economies. This means that in today’s economy, gold and silver bullion, rare coins and other investments have great potential. For many analysts, both past performance and current conditions suggest that gold and silver prices are ready to rise. 

Shannon King

Senior Staff Writer –

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