Gold vs Silver, tussle continues

Tussle between gold and silver as far as returning profits to investors remained a highlight so far this year, Analysts said.

As investors continue to buy gold as a safe haven amidst economic turmoil, some analysts believe prices might rise to $2,000 an ounce by the end of this year, and may go as high as $2,300 by the end of 2012.

The safe haven status, coupled with increased demand from emerging markets, and the fact that, while gold prices have risen dramatically this year, its price has not strayed far from its statistical mean, could point towards gold breaking out above this year’s highs.

Investors have had a wild ride in gold and silver this year, and many analysts expect the volatility to continue. Gold is still far from its January, 1980 inflation-adjusted high of $2,300 per ounce, indicating that gold very likely will continue to climb higher.

Silver has industrial applications and is an increasingly popular investment vehicle. Silver prices, like gold, have been experiencing price swings, and moved to an all-time high of $49.51 per ounce in late April 2011.

After a rapid climb to nearly $50 per ounce, trading was tempered by a move at the Chicago Mercantile Exchange.

Concerned that silver was becoming a potential haven for speculators and in an attempt to reduce volatility, CME Group Inc.’s COMEX unit raised margin requirements on silver trading several times; these moves quickly slowed silver’s climb.

Since the April highs, silver has been able to piggyback on gold’s success much of this year, having spent several months in the $40 – $50 range while gold reached its highs in September.

Earlier this year, gold prices jumped in response to rising oil prices, political unrest and the threat of violence in the Middle East and North Africa (MENA) region.

The economic downfall of the last several years has helped ignite an increased interest in gold prospecting and investing. Gold prices, which have fluctuated within a $500 range thus far in 2011, can be affected by a number of factors, analysts added.

As the year progressed, concerns shifted to the European debt situation. On Nov. 7, 2011, gold and silver futures jumped in response to European debt concerns.

Following speculation the prior weekend at the G20 summit regarding the fate of German gold, Germany rejected proposals by France, Britain and the United States to allow its gold reserves to be used as collateral for the eurozone bailout fund. - bullionstreet.com

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Posted by Silver Guru on Nov 25 2011. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry