The price of silver is responding well to current market conditions, but gold has yet to leave the gate.

March 28, 2011 – Gold and silver “are justifying their reputation as safe havens, which is hardly surprising in the current climate,” said Commerzbank analysts as reported in Market Watch. The price of silver is responding well to current market conditions, but gold has yet to leave the gate. The race is far from over, however, and those who get in before gold inevitably sprints to catch up to the pack will be glad they did.

The naysayers, as usual, are particularly vocal. “Get back into stocks,” they say “Get in on the rally.” But “the light volume on a rally indicates a lack of any desire to sell, not that there is any compelling reason to buy,” said market strategist Marc Pado in Market Watch.

“The economy is moving forward,” says the Fed, pointing to eight months of rising factory production. But orders for durable goods – especially for factory machinery – are still on the skids. A factory whose production fell to 10% capacity during the recession and has now inched back up to 20% would boost output statistics. But until that company gets production back up to near capacity and has confidence that the economy is growing, it is not about to make capital investments.

The economy is going nowhere fast and may well be headed back into recession. Once again leading economists have lowered their predictions for GDP growth this year, now down to 2.5% or less.

Individuals are recognizing that the safest place they can put their money is in precious metals. As would be expected, silver’s lower entry cost has given it a head start over gold and will continue to play a major role as silver soars to new heights throughout the year. But gold’s time is coming, too.

The turning point will be when retail investors see that, unlike Wall Street, the markets for gold and silver are still driven by the fundamentals.

Shannon King

Senior Staff Writer –

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