Silver

Mitch has some valid points, but I don't see silver at $130 US/oz.

Industrial applications and photography account for more than 50% of worldwide silver demand. Jewelry, silverware, coins and investments make up the other chunk. Since 2000, worldwide silver demand hasn't increased at all. And without the investors, demand would have actually fallen by 10-15% since 2006. Looking at the fundamentals, there isn't any obvious reason why demand should increase in the foreseeable future. If anything, demand for photography should continue its steady decline until everyone owns a digital camera. Industrial and automotive demands will likely continue their downward trend, unless worldwide economies pick up sometime next year or in 2012. In the meantime, industries are exploring other, cheaper alternatives to silver.

Demand for jewelry, silverware and coins can possibly offset the losses, but as silver price increases, so does production cost... This should ultimately backfire and cause a slowdown in consumers demand, especially during these tough economic times. Such overly marked up items aren't appealing to investors anyway, so I just can't see any reason why demand would ever increase significantly in those segments.

Unlike silver, gold demand is driven almost exclusively by investors and for making jewelry. So as long as gold price continues to increase we can expect silver to follow the same path. But in the event of a gold meltdown, silver will inevitably follow. So the real question is: has gold reached a plateau? I doubt that silver investors have been dragged into this hoarding frenzy since 2006 solely based on the notion that silver rarity has increased. Maybe it has, but there is probably enough scrap silver laying around to fuel the demand even if mine production stopped for a decade.

So we are left with a couple wild-cards: the investor who is largely influenced by the price of gold (and its historical price ratio with silver), and the manipulators (HSBC, JPMC ?). But again as one said: "Prediction is very hard, especially about the future" - Yogi Berra

$130/oz? I don't think so. But I am keeping a few onces, just in case...

True, but gold is much harder to mine and refine, thus contributing to its higher (relative) price.

silve5r will be $ 45 before year end........or I eat crow....