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While gold has breached the technically crucial 200 day moving average, signaling a strong bull market going forward, silver is making some news of its own.

January 12, 2012 – While gold has breached the technically crucial 200 day moving average, signaling a strong bull market going forward, silver is making some news of its own. The New Year’s rally in silver has been especially strong in 2010 and 2011, with prices jumping. This year a strong New Year’s rally was expected in all precious metals and did indeed manifest, the price of silver, however, is still very affordable considering how much buying is going on right now.

Gold is firmly above the $1,600 an ounce level and John Embry of Sprott Asset Management, the Canadian Hedge Fund famous for its third quarter $1.5 billion order of silver bullion, may be right when he says we will never again see gold at the $1,500 an ounce level. While gold breaks those technical barriers, a report has surfaced today that in the first ten days of this year the US Mint has already sold 4.3 million ounces in silver coins.

To put that number in perspective, in the first ten days of 2012, the US Mint sold more silver coins than were sold in all but two months of 2011. In January and September of 2011 the US Mint sold 6.4 million ounces and 4.5 million ounces, respectively. The critical reader will notice that the 6.4 million ounces sold in January reflect the strong silver New Year’s rally, previously mentioned. And the 4.5 million ounces in September is precisely the timing of the correction when the price of silver dropped over 20 percent, making the metal more affordable than it had been in months.

We are now in the first wave of exiting a similar correction and investors who have been waiting for the technical signs to proceed are entering the market in force. Gold is in safety zone and fully stabilized above $1,600 an ounce with every indication of moving even higher in the weeks to come. Silver, despite the US Mint selling more ounces in ten days than in ten of the months of the previous year, has certainly reestablished some ground, but current prices vastly underrepresent buying trends. Gold is reflective of the action in the market, but silver should be valued more highly and is currently selling at what amounts to a discount.

Shannon King

Senior Staff Writer – GoldSilver.org

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