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 From:
GoldMoney - Gold Research
http://goldmoney.com
Is Silver Ready to Move Higher?
http://goldmoney.com/gold-research/is-silver-ready-to-move-higher.html
James Turk writes --
It is gold - and not silver - that gets all of the attention being given to the precious metals these days, and why shouldn't it? After all,gold has risen nine years in a rowagainst the US dollar and appreciated during this period at an impressive averageannual rate of 17.1%. In a continuation of this trend, gold is up 9.9% year-to-date, making it one of this decade's bestperforming asset classes. But don't overlook silver.Though it has risen only seven of the past nine years,silver's 17.6% average annual rate of appreciationduring this period is actually higher thanthat achieved by gold. This year silver has risen 9.7%, approximately the same as gold.The implication of these similar rates of appreciation is that the gold/silver ratio, which is the number of ounces of silver that equals the value of anounce of gold, is little changed this decade. This result though masks silver's characteristic volatility.Though the gold/silver ratio is little changed from the beginning of the decade to the present, it has been in a broad trading range that actuallyextends for nearly two decades, bound between 46 and 84 ounces of silver to equal one ounce of gold. This trading range is delineated by thehorizontal red dotted lines in the following chart.There are three clear conclusions from this chart. Given the fluctuations in their ratio, silver is a lot more volatile than gold. Just look at how theratio rose in the 1980s from 17 at the beginning of the decade to 100. That level of volatility means that silver is not for everyone.The second conclusion is that compared to gold, silver is still relatively cheap. In other words, their ratio remains relatively high compared tohistorical experience.Third, note the downward sloping red lines on the above chart. The gold/silver ratio is in a downtrend, meaning that from 1990 to the present,silver has outperformed gold.So should you own some silver in your precious metal portfolio? The fact that it is still relatively cheap compared to gold is only one compellingreason to answer this question in the affirmative. There are other reasons too.Ignoring for the moment their different price, owning an ounce of physical silver is like owning an ounce of physical gold. Both accomplish thesame thing. Both are tangible assets, and that means they do not have counterparty risk because physical metal is not a financial asset. Thevalue of gold and silver does not depend upon anyone's promise. But there is another important factor to consider.Silver has never been confiscated by any government. This characteristic alone makes it worthwhile to seriously consider owning some physicalsilver. Another factor to keep in mind is that the following chart is very bullish.
 
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