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Silver is Hot, Hot, Hot

Those who followed my advice to watch silver should by now have the precious coins raining down upon them.

Since then, the precious white metal has jumped 8% to $19.30, just pennies short of a multiyear high, compared to a more pedestrian 4% move by gold (GLD). It is thus fulfilling my prediction that it would outperform the barbaric relic by 2:1 on the upside.

The action has spilled over into the miners, with Coeur D Alene Mines (CDE) rocketing by 19% in two weeks, while Silver Wheaton (SLW) is up 14% and Hecla Mining (HL) has tacked on an impressive 16%. 

Precious metals traders have been stumped by the move, expecting that industrial demand for silver would slump in the face of a double dip recession. What they aren't seeing is the surging monetary demand for silver, which continues to grow beyond all expectations. Not only do you see Americans and Europeans fleeing into silver, rather than lock themselves into 30 year returns in the Treasury bond market at 2.5%, the Chinese are leveraging up a rising standard of living into increased silver coin purchases.

Silver also has a much bigger catch up game to play. While gold is a mere 2% off its all time high, silver must appreciate by 153% to reach a new peak.

Your choices here are the silver ETF, the miners listed above, or futures contracts listed on Comex. You can also get physical by adding to your holdings of .999 fine silver buffalos at a small margin over spot by clicking here. If these guys sell out, shop around, because there are plenty of other merchants with competitive prices. You can always use them to bribe the border guards when you are fleeing the country.

Courtesy: Mad Hedge Fund Trader




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  • Anonymous on September 01 2010 said:
    Dude!Its great that your plugging silver and you are quite right it will out preform gold but please don't mislead people into thinking ETFs are as real and solid an investment as the real metal.I know and you should not that leverage is rife in the system and that much "paper" silver is bogus. Physical bullion is the best for long term investors, sure day traders and such can work the ETFs but as a nest egg and to ensure the price does max out well past its historical high people need to take the real metal off the market.

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