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« Silver Wheaton Corporation Pulls Back | Main | Silver Wheaton Corporation: Earnings Triple »

Silver and Gold Update 17 May 2010

SLV and GLD Chart 17 May 2010.jpg

This chart caught our eye this morning as we were checking out various sites in order to get a 'feel' of just how the week is shaping up.

By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- Investors are finally giving gold's "ugly sister" a second look.

Silver's gains in recent months have significantly outpaced gold's, with silver climbing around 30% since early February, compared with gold's nearly 17% price gain.

And some analysts say silver hasn't yet caught the attention it deserves.

Investors "are not taking notice yet it looks like the world is far more focusing on gold," said Gijsbert Groenewegen, a managing partner at Silver Arrow Capital Management.

That's fair to say given that silver's more than two-year high above $19 pales in comparison to gold's highest-ever settlement price of more than $1,243 an ounce in New York for its most-active futures contract. See story on gold's record level.

Groenewegen pointed out that the average gold-silver ratio is 52, but the ratio is currently around 63, "so silver has some catching up to do."

"While silver has outperformed gold in recent months, it has massively underperformed gold over the long term," said Mark O'Byrne, a director at GoldCore, an international bullion dealer.
Gold's nearly 50% above its nominal high in 1980 of $850, while silver remains at less than 60% of its 1980 high of around $50, he said.

"Investors continue to view silver as gold's ugly sister," he said.

On the following chart we can see that Gold has slightly outperformed Silver this year. The difference between this chart and the one above is the time scale. The point being that we can obtain different results depending on the time scale we chose so take care when using them.

Silver and Gold 17 May 2010 B.jpg

Also, the first chart is using the 'funds' to plot performance and the second chart is using gold and silver to plot performance.

The same statistics can be used to portray a myriad of different stories, a snap shop of a period of time can tell one story, which can be countered by the next snap shot using slightly differing criteria.

Just our thoughts for the day as we often have difficulty in trying to present data that reflects the situation as it and not as we would like to see it, one of the problems of being silver bugs!

Keep smiling its all falling into place for gold and silver bugs.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

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Reader Comments (4)

of course, during deflation silver will underperform gold, countrary during inflation , silver will outperform gold, like in 1980s. i think we still going to see silver at 2.50 before it breaks above 20 bucks

May 17, 2010 | Unregistered CommenterDi

How well is that campaign of shorting silver and gold all the way up going Di? Just curious. Seems like it would get expensive.

Silver at $2.50. Got it. I'll start planning now.

Oh, and what exactly is your definition of a double top? Because that double top you called in gold a couple of weeks ago turned out to be a breakout to a new high. Go figure. Markets that break out to new highs on high volume following a long period of consolidation are not definition.

Don't tell me...must look like an ideal shorting opp. to you. See...I get it. No need for further haruspications re: the direction of the metals on your part. Really, you've done enough.

May 17, 2010 | Unregistered Commenterfallingman

Ahh Fallingman, the Financial Dyslexic's in Di provide for comic relief, eh? Some NEVER "get it", that's the nature of things...

May 17, 2010 | Unregistered Commentersnakeman


Any comments on todays silver price action?

May 18, 2010 | Unregistered CommenterSilver Prices

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