Silver Investing News

By Melissa Pistilli-Exclusive to Silver Investing News

Precious metals prices have performed miracle feats the last few weeks, rising higher and higher to set new records as the US dollar suffers further blows, inflation in North America shows real signs of rising, and economic data out of Asian markets points toward fresh industrial demand.

Silver’s rich cousin gold and its blue-collar buddy copper are both boosting the silver price to new heights this week.

Gold reached a record high of $1153.90 per ounce early in the trading day Wednesday, to close at $1144.40. Silver rallied to $18.86 before dropping to $18.56, still up nearly 7 per cent from this time last month, and up 94 per cent from a year ago.

The recent IMF 200-tonne gold sale to the Indian Reserve Bank, the weakening dollar and inflation fears have all helped to spur increased demand in gold in recent weeks.

Inflation worries have permeated the markets for months, but real signs that inflation is on the rise in the US and Canada came in October. Last month, the US Consumer Price Index climbed 0.3 per cent, over 0.2 per cent than anticipated. In Canada, the annual inflation rate increased for the first time since May, rising 0.1 per cent in October.

Positive economic data out of Asia is fueling bullish moves in copper and silver, as well. Copper hit a new 14 month high on Monday, reaching $3.1090 per pound.

Strong economic data out of China is boosting commodities prices in general. Last month, China’s industrial production and retail sales figures showed an annual growth rate of 16 per cent and its trade surplus doubled from September to US$ 24 billion, reports the Vancouver Sun’s Gregory Thomas.

The silver price has also no doubt been helped by its industrial use in electronics manufacturing and bullish economic data out of Japan, where machinery orders rose 10.5 per cent in September. Earlier this week, Japan announced that in the third quarter its economy grew at its fastest pace in over two years, said Bloomberg reporter Stephen Voss.

Silver’s industrial uses account for around half of its demand and this number is expected to grow as economies around the world recover. And rising inflation will no doubt push investor demand as well.

Because of its dual nature, there are those for whom silver glitters more than gold.

Peregrine Financial Group VP Bob Tebbutt says “we’re getting more of a confident mood in our industrial commodities, and industrial commodities are gaining favour and that means silver is gaining favour over gold.”

In a recent interview, Jim Rogers said compared to gold, silver is the “better buy” right now. Rogers says that despite gold’s record breaking highs, silver is still down 70 per cent from its all-time high.

John Ing, CEO of Maison Placements agrees. “Gold has made new highs, silver has not made new highs, so therefore there’s probably significant room on the upside for silver,” he said. Ing’s near-term target is $22 and, as The Times & Transcript reports, he views physical bars as a “very attractive investment” and silver company shares as possibly offering more leverage.

Several silver miners are experiencing rising share prices as silver shines. The table below shows the share prices for select Canadian and US-listed miners on November 19, 2007 when the Comex silver price was $14.15 per ounce, on November 18, 2008 when silver was $9.57 and today’s closing share price.

*On the TSX