You’re right there. Even the Wall Street Journal agrees.
http://online.wsj.com/article/BT-CO-20110421-711445.html
Dollar Weakness Boosts Comex Gold, Silver
By Tatyana Shumsky Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)—Comex gold futures kept above the $1,500 level while silver set a record as a weaker dollar and thin pre-holiday trading volumes lent support.
The thinly traded April-delivery contract was recently up 0.3%, or $4.70, at $1,503.00 per troy ounce on the Comex division of the New York Mercantile Exchange.
The most actively traded contract, for June delivery, was 0.3%, or $4.90, at $1,503.80 per troy ounce.
A weak dollar kept gold prices buoyed above the $1,500 mark as investors opted for the safety of the precious metal. The euro rallied to a 15-month high against the dollar overnight as confidence in the greenback whittled further. The dollar has declined sharply since credit ratings agency Standard & Poor’s rattled markets Monday by putting long-term U.S. government debt on “negative” outlook.
The euro was recently at $1.4559, up from $1.4523 late Wednesday in New York.
“The dollar is the major motivator there right now,” said Stephen Platt, analyst with Archer Financial Services.
Gold is considered a store of value and an alternative currency and benefits from concerns about the integrity of paper currencies like the dollar.
Thin trading volumes also lent gold prices some support as trading slowed ahead of the long Easter Holiday weekend. Comex floor and electronic trading will be suspended Friday in observance of the Good Friday holiday. When trading volumes are low each trade tends to have a larger impact on prices.
Meanwhile, silver for May delivery set fresh 31-year highs as the contract gains on the 1980 record set when the Hunt Brothers of Texas attempted to corner the silver market.
The front-month contract was recently up 2.3%, or $1.020, at $45.485 per troy ounce after touching $45.485 earlier. The contract is still short of the 1980 front-month record of $50.360.
Silver for May delivery, the most actively traded contract, was up 3.2%, or $1.409 higher at $45.870 per troy ounce. The most-active contract hit a record $46.270, out-pacing the 1980 most-active high of $41.50.
Unlike the 1980 spike, silver has reached its recent highs thanks to a robust rally. Demand for silver as a store of value and a currency alternative has boomed as many price-conscious investors balked at gold’s $1,500 price tag and opted to safe-guard their wealth using the cheaper precious metal.
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Today all the silver mines of the world together can not keep up with the industrial demand for silver. Silver is a very nice way to store wealth but takes up a lot of room.
Silver is used in so many industrial processes we would take many pages just to list them all.
Even if we weren’t having spiraling inflation the price of silver would be going up. The industrial demand is just too high for it not to feel the pinch.
Normally, a good economy keeps people from worrying about having a stash of precious metals but when it hits the fan everybody gets worried. If the economy does start to pick up industry will increase its purchasing of silver, that will only add to the price pressure and make inflation worse off which will scare people and make them want more security, therefore the spiral.
The government started this with their ridiculous deficit spending. The government borrows from itself and calls it a loan. The money is not real and people are finally understanding it, this coupled with demand will make the value of the dollar totally worthless. We will be no different that Rhodesia where you have to have gold or silver to buy anything.
I have recommended to my friends and to people here to buy silver since it was about $7.00. I hope you have some. I personally believe it will hit at least $100.00 before it slows down.
Under average conditions 1 oz of gold will buy 15 ozs of silver, right now it is about 35. Silver is a good buy until it gets to 15. Buy!
The economy is tanked. When you realize that inflation is at over 20% and should be much higher and soon will be you will understand what fear is all about.
The government is stealing the value of all of our savings without changing any laws. If you had $1,000,000 in savings last year it is not even worth $800,000 (in buying power) this year. Next year you will be lucky to have one half the buying power of last year. If you are old, like me, I sure hope you own everything you have, if you don’t then pay it off now! Use your money before it becomes worthless! Once it becomes worthless paying it off would be easy except that everything else you need like food and fuel will be so high you won’t have anything left over to pay for your mortgage. Convert all the savings you have into something that won’t lose its value, Precious metals, real estate and certain commodity stocks are good.
Put several months, at least, of the items you normally purchase in your basement. Store shelves could become bare as businesses go out of business or as costs go so high that they can’t afford to keep items in stock. Shortages in fuel will mean that deliveries will be late.
It doesn’t cost any more to purchase now what you will use anyway, if fact when you use items purchased at yesterdays prices in a runaway inflation you come out ahead.
Get ready for a real roller coaster ride in the near future.