Silver is currently underpriced relative to gold and may offer the best opportunity for long-term profit in the metals sector. The dispersion in performance between these two precious metals also has led to a drastic widening in the gold-to-silver ratio from 50x in early 2007 to its current level of 72x, the highest level since 2004. The demand for silver not only stems from its use as a raw material to manufacture jewelry and silverware, but also from its numerous industrial applications. With the gold-to-silver ratio at elevated levels relative to historical norms, traders have the opportunity to profit in the short- to medium-term.
Why silver may outshine gold Charles Gradante Futures; May 2009; 38, 5; Docstoc pg. 18 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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