Credit: The "poor man's gold" is catching up to the record-breaking rally that gold itself has recently enjoyed. Silver for immediate delivery leapt 5.4% overnight to $49.79 an ounce, well above the previous record of $49.45 touched in early 1980. Since silver was barely trading at $28 in January , this represents a stunning 78% move over the last four months. Retail and institutional traders alike are betting that between QE2 and the prospect of prolonged wrangling over the federal budget, the dollar will keep weakening from here. While today's action seems more driven by speculative excitement -- traders pushing the metal's price higher to challenge and then break the record -- the long-term fundamentals seem balanced in favor of stronger silver ahead. Compare the environment now to 1980, when the metal's record-making spike was attributable to a concerted speculative attempt to corner the global market, but inflation was actually moving down from the oil embargo peaks of the 1970s. Meanwhile, SLV ( quote ) is the way to play the metal if you do not have a commodity futures account or simply do not want to hold a lot of physical silver.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
