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silver price forecast

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Silver Price News Today

By , Contributing Writer, Money Morning -

Our silver price news today looks ahead at another volatile week for the white metal as global precious metal sentiment remains guarded.

In early-morning trading Monday, spot silver was trading down 1.5% at $21.88.

Silver traders are closely watching the Wednesday outcome of the Federal Open Market Committee's (FOMC) two-day meeting to see if the U.S. Federal Reserve finally follows through on plans to start weaning the U.S. economy off five years of quantitative easing (QE).

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Invest in Silver Before Prices Climb Higher

By , Money Morning -

Silver prices are up this week on hopes of a third round of quantitative easing, or QE3, reaching their highest level in four months.

U.S. Federal Reserve Chairman Ben Bernanke on Friday hinted at further central bank action and silver prices jumped more than 3%. They've continued climbing this week to over $32 an ounce.

Speaking at the annual Jackson Hole, WY economic symposium, Bernanke expressed concern about the U.S. labor market stagnation and said yes, he is open to more quantitative easing to assist the economic recovery.

Details weren't included but it didn't matter: Bernanke said the magic words.

Silver has jumped on the bull train thanks to inflation concerns and talks of quantitative easing by central banks. Buyers increased in volume after the Aug. 22 release of Federal Reserve minutes, extending a rally that had been kicked off by signs of European solidarity.

It's not just U.S. news that's keeping the run going. German officials, including Chancellor Angela Merkel, are starting to sing a different tune for the European Central Bank's (ECB) stimulus activities. This may help reduce borrowing costs for debt-ridden Eurozone nations.

All these signs are reasons to load up on metals before prices take off higher.

"From now on, this is a dip-buying market," David Govett, head of precious metals at the brokerage Marex Spectron, told The Financial Times. "Yes, there will be setbacks along the way, but fundamentally the market is now in bull mode."

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Why Investors Are Hoarding Silver

By , Money Morning -

With the U.S. Federal Reserve failing to take monetary action a few weeks ago, silver prices saw an opportunity to deflate, but instead have held steady around $27 an ounce.

Investors' silver holdings are approaching record highs as speculators exit the precious metal and exchange-traded products with silver add to positions. In the last three months, these products' holdings have grown to a $16.2 billion value, reported Bloomberg News.

But they're poised to get even higher.

Analysts have forecast that silver will average $33.02 an ounce in the fourth quarter-an 18% rise from current prices.

Since last week silver has been increasing and closed up 0.35% to $28.00 on Friday.

So why are investors bullish on silver? There are a few reasons.

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Gold Price Outlook 2012: Miners Will Shine as Prices Soar

By , Resource Specialist, Money Morning -

Despite a pullback from its all-time high of about $1,920 an ounce set in September, gold is still trading in the $1,750 range. In fact, the glittering metal has gained 22% in the past 12 months.

What's more is that I believe gold prices will eclipse $2,200 an ounce next year, and shoot beyond even $5,000 an ounce after that.

So there's obviously still time to get in on this once-in-a-lifetime bull-run, if you haven't already.

Of course, every investor should at least have shares of a gold-based exchange-traded fund, but if you really want to profit from the price surge, you ought to look at gold mining companies.

Let me explain.

A Golden Opportunity

While gold prices have surged 22% over the past year, gold mining stocks have lagged curiously behind over that period.

The Amex Gold Bugs Index, a weighted benchmark made up of 16 of the world's largest gold and silver mining companies, began the year at 540, and after numerous troughs and peaks, we're back near those same levels.

Normally, gold stocks will leverage gold on a 2-for-1 basis, but in this case, we've seen miners move sideways as gold has advanced.

Yet with gold's price powering skyward, the gold miners have seen their margins expand, making them very profitable at current levels. That makes them absolute steals at these prices.

You don't have to take my word for it, either. Just look at what industry insiders are saying.

"A substantial disconnect has developed between the price of gold and the mining companies," said David Einhorn of Greenlight Capital. "With gold at today's price, the mining companies have the potential to generate double-digit free cash flow returns and offer attractive risk-adjusted returns even if gold does not advance further. Since we believe gold will continue to rise, we expect gold stocks to do even better."

Portfolio managers Michael Bowman and Allan Meyer of Wickham Investment Counsel Inc. concur.

"We are now finding a large number of gold stocks are hitting our value screens, something that has been unheard of in the past," said Meyer.

What else are experts noticing?

Well, as gold prices have risen and stayed high, the price/earnings (P/E) ratios of gold miners have been cut in half. That means the sector as a whole is at as compelling a value as it's been in three years. And with the price of gold set to rise still higher on the back of incessant money printing in the United States and Europe, these miners are only going to get more profitable.

How high is gold likely to go?

My own research tells me we should expect gold to easily reach $2,200 in 2012.



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