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Gold, Silver Move Opposite One Another on Technical Factors

In an uncommon yet not unheard of development gold and silver prices moved in opposite directions Thursday, with gold gaining $1.70 while silver lost $0.09 per ounce. Analysts blamed silver’s slight downfall on heavy selling and higher-than-expected output reports from two major silver producers while attributing gold’s slight gain to technical factors and short-covering.

As of 11am Texas time the gold spot price was at $1228.10 while silver was struggling just under the $20 mark at $19.48 per ounce. Though analysts have predicted that the gold/silver ratio will shrink in the coming years silver has thus far been able to gain any ground on gold.

Swiss investment firm MKS said recently that it believes the gold spot price will average $1262 in 2014, and the company sees silver lying flat at $19.50 per ounce. Other organizations have taken the opposite position by saying that gold could fall to $1100 or lower while silver’s high industrial demand and usefulness as both an investment and a currency could propel it to the $30 range before 2015.

The average gold/silver ratio over the last 100 years is about 20:1, but in recent years that figure has extended to approximately 60:1 as gold has dominated headlines and seen strong interest on the certified coin and bullion sides alike. If the gold spot price was to remain at $1200 then a gold/silver ratio of 20:1 would put silver at $60, roughly three times today’s silver spot price. Gold’s 2011 high of $1916 per ounce would equal a silver spot price of $95.80 if the ratio stood at 20:1.

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