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<p>[QUOTE=&quot;jolumoga, post: 1718181, member: 41780&quot;]Silver, as a volatile metal, will tend to have exaggerated movements based on economic data and its correlates.&nbsp; For example, when the dollar lost value in early 2011, silver shot up to $50 -- yet no one (I think) would suggest the actual gain in general price inflation was equal to the surge in the price of silver at its peak.&nbsp; So when it is claimed that silver is a hedge to inflation, I think it&#039;s partly true.&nbsp; Silver has the tendency to overshoot in either direction, certainly more than gold.&nbsp; </p><p><br /></p><p>I also believe, while the supply and demand numbers are important for the long term, those scrutinizing the numbers in great detail may be missing the psychological factors driving the market in the short and intermediate term.&nbsp; For example, some anti-silver bugs believe the drop in the price of silver is the result of excess supply, whereas the silver bugs insist there is a shortage somewhere in the supply chain.&nbsp; I find it interesting that neither side mentions the dollar index, though reference to dollar strength and its relationship to the drop-off in commodity prices is noted on occasion within the mainstream media.&nbsp; Mind you, that banks coordinate to fix prices and that commodities move based on currency strength are not mutually exclusive ideas.&nbsp; </p><p><br /></p><p>If the dollar index breaks past 84-85 and reaches 100, you can bet silver has a good chance of falling into the teens.&nbsp; This would be a symptom of deflation overpowering inflation, by the way.&nbsp; Of course, the market may be wrong in its assumptions, leading to large corrections at times.[/QUOTE]</p><p><br /></p>

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