Reply to Thread

Message:: [QUOTE="InfleXion, post: 1319169, member: 29012"]The primary function of gold is an inverse measure of the value of currency, a hedge against inflation, and beyond that it has additional safe haven demand as those functions are called upon by people. Silver loosely follows gold, but industrial demand gives it a bit of a mind of its own. To answer your question I would need to know whether banks will increase or decrease the money supply. If they increase, the price will rise, and if they decrease it will fall. They have shown a consistent track record of increasing, as well as have committed to near zero % interest rates until 2013 which also has the same effect of increasing the money supply. Central banks around the globe have been buying up gold like crazy, and Chinese imports in Q3 2011 alone exceeded the yearly record they set in the whole of 2010. So I think we are about to see prices go much higher in 2012. However, the price is set significantly more so by supply and demand in the paper traded markets than the physical market, so the price can really do whatever it wants regardless of fundamentals until the physical market takes precedence. From a physical supply and demand standpoint I believe silver has much greater potential than gold.[/QUOTE]