Monday morning across the globe marked a historic day! The day that silver climbed to even higher places that it has not been in decades once again. Silver has knocked out $41 and is well on it’s way to $42… As I write this silver is up .60 and trading at $41.55/oz. The gold to silver ratio is shrinking everyday, currently at 35.48
With Friday’s scare of a Government shut down here in the U.S., it pushed the metal up over $40 to close at $40.95. Althought the shutdown never happened, an iron clad agreement didn’t happen either concerning the U.S. budget. The dollar has taken a big hit over this fiasco and is causing investors to find a safe haven in gold and silver. The disparity is growing between actual physical investments and paper backed metals investments such as ETF’s. Small investors that are involved in ETF’s can not be paid in metal form, although the investment is backed by stored metal in a depository.
Oil is continuing it’s rise as well as other commodities across the board. The majority of traders out their are forcasting for metals to rise this week, as hedge fund buy stops have been triggered. Buy stops are a set price that triggers buying for fund mangers.
The precious metals market is such a lightly traded market, it does not take too much to effect the prices. Combine the safe haven run by individual investors, and the above mentioned buy stops, and $45 silver could be seen very quickly.
Forecasts for the white precious metal have been raised for this year by many already. Some saying we could see $50 silver by the end of summer 2011 and $60 silver by years end. A statment that did make us nervous however, was the fact that JP Morgan raised their forcast as well…. there forcast was raised by 20%, by them saying that silver would average $31 this year. If that is the case, profit taking could be in store in the very near future. But this is coming from the mouth of those that shorted silver for a very long time and have recently lost control of the grasp they once had, so something to keep in mind, but not a sole factor in making a decision.
To great profits in precious metals, have a great week and stay tuned as coverage will be heavy this week.