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Can silver win the race?

Silver is spurting toward $20 an ounce. Gold is moving toward $1,000. Which will cross the nice round number first?

I don’t know, but today I am leaning to silver. Why? Well, it is one of those peculiar reasons. My firm publishes gold and silver value charts. These list the value of the bullion in various widely owned coins at various market price levels for the precious metals.

The current gold value chart tops out in the value listing at $1,200. The silver chart tops out at $20. We have run out of these. The internal mechanism for getting more printed was swinging into motion and I had to pass the word yesterday that the chart needs to be modified otherwise we would be paying production costs for something that looks set to be useless in just a few days.

Sure, silver could top out at the $19.21 that it settled at yesterday, but I don’t want to bet company money on that possibility. I would much rather see the new charts run up to the $25 area, and even that could become obsolete soon.

Our Federal Reserve chairman is so worried about the banking crisis and the need to cut interest rates, that it appears anyone with any investable funds has decided to take a spin in the commodity casino. Why collect a paltry 3 percent interest from banks or funds that may blow up when you can get huge percentage gains in commodities?

Everybody is watching the $100 mark for oil and the metals milestones but fewer are following things like wheat on the Minneapolis market hitting $24 a bushel when not that long ago it was less than $5 and this story seems to be repeating over and over across the board. Coffee has been soaring, too. That of course worries me most of all. What would I do if I couldn’t afford my morning three cups?

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2 Responses to Can silver win the race?

  1. Carl says:

    I agree that silver will win the race. Gold is seeing resistance on and off. As for the coffee, you’ll have to cut back or consider tea. Probably not likely given the name of your blog!

  2. Scott Barman says:

    I think that silver will hit $20 before gold reaches $1000. There are certain milestones that investors seem to be reluctant to cross. Even the $100 per barrel price of oil is a reluctant barrier. Now that it crossed that $100 barrier, it will go up. It will eventually happen to gold.

    Gold is different from oil in that it is a reflection on the strength and value of the dollar. The weaker the dollar, the higher the price of gold. When the price of gold reaches $1000, it will be seen as the result of a weak dollar and bad economy that will put downward pressure on the markets. It will all to the devastation of the market and throw the country deeper in to a recession.

    Interestingly, the president acknowledged the economic issues yesterday in advance of a bad jobs report and the report of bank woes. The market responded by beating down the dollar on the open market where it takes $1.51 to buy one Euro. Gold is now $970 and silver is $19.76. Metals up, stocks and the dollar down. It does not look good.

    And Dave, when it come to coffee, I feel your pain!!

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