The Premier Silver Resource Website

Live Spot Silver
Silver Market Articles
Silver Discussions at the Forum
Silver Company Links
Silver Market Updates
Silver & Gold Headlines
Silver Stock News
Silver Equity Quotes
Silver & Precious Metals Quotes

Will Silver Now Start To Outperform Gold?

By: Peter J. Cooper

-- Posted 9 April, 2009 | | Discuss This Article - Comments:

Precious metal fans face a conundrum in choosing to buy silver rather than gold: silver prices are more volatile but have always outperformed gold prices in previous financial crises.


So you might sleep better as an investor in gold but ultimately lose out to silver. An equal split asset allocation is one way of hedging sleep and performance.


It is notable, for example, that the correction in silver prices since the peak of March 2008 has been larger than gold. Silver more than halved before rebounding while gold lost a third in price before coming back.


Looking forward


Then again if you had bought at the bottom point for both metals over the past year gold is now much closer to its March 2008 peak price than silver, and you would have made more money. What to do going forward?


The gold-to-silver price ratio is now 70 compared with a range of 30-100 over the past three decades, although it has been as low as 15 during periods when silver was used as money.


Given that currency competitive devaluations and inflation are the likely drivers of higher precious metal prices over the next few years that would seem to give the advantage to silver. It does tend to become a ‘poor man’s gold’ as gold prices rise, and in India there is already some evidence of this happening.


The real test for gold and silver will come in the next down leg of this bear stock market towards a capitulation phase. Will those finally giving up on equities shift their money into precious metals if they fear inflation is about to hit bonds?


Judgment call


It is possible, or there might be an intermediate phase in which gold and silver are temporarily sold down in a market crash - like last autumn - and only later find their role as a bond replacement.


However, history suggests silver will be the better performer, and stocks of silver are reckoned to be less than one-hundredth the size of gold reserves, so the supply and demand equation is already stacked in favor of silver. Monetize gold and silver and there will not be enough silver available and the price will go up.


There is a risk that gold and silver prices will fall as equity markets fall, or even a risk that foolish investors might send the stock market rally a little higher, but probably the biggest risk is being caught short of both precious metals when prices take off.

-- Posted 9 April, 2009 | | Discuss This Article - Comments:

Article Archives is presented to you by:

© 2003 - 2011, Silver Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.


The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.