Silver’s 30-Year High is Just the Beginning: Target Price $38/Ounce (SLV, SIVR, AGQ, DBS, ZSL, USV, SIL)
The price of silver today (Monday) surged above $30 an ounce for the first time since 1980, after U.S. Federal Reserve Chairman Ben Bernanke indicated that further quantitative easing (QE) could be on the way.
Silver futures have gained almost 70% since August, when expectations of more QE were first discussed. Since then, the Federal Reserve has set about purchasing $600 billion of U.S. Treasuries and the Fed Chairman said on Sunday that more debt purchases are “certainly possible.”
The result was a rally in precious metals, which played host to investors looking to preserve their wealth against further depreciation. The price of silver topped $30 for the first time since 1980, soaring as high as $30.09 an ounce in afternoon trading.
But that’s just the beginning.
Money Morning Contributing Editor Peter Krauth recommended buying silver on Sept. 1 when “white metal” was trading at about $19 an ounce. More recently, however, Krauth on Dec. 2 said silver had the potential not just to break the $30 an ounce barrier, but climb significantly higher.
“I believe we’re looking at a target price for silver of $38 an ounce,” said Krauth, citing the Fed’s quantitative easing policy and the oft-overlooked sliver-to-gold ratio.
Gold also rose today with a surge into record territory. The “yellow metal” gained $9.50, or 0.7%, to $1,415.80 an ounce on the Comex division of the New York Mercantile Exchange (NYMEX). It earlier traded as high as $1,422.40 an ounce.
The metal last closed at a record on Nov. 9, when it settled at $1,410.10 an ounce.
Action to Take: If you would like some additional insights on strategies for investing in silver, take some time to peruse some of Money Morning‘s recent research reports on this very topic. For instance:
- If you’re new to precious metal investing, and would like a primer, check out Special Report: How to Buy Silver.
- For a more-specialized silver strategy focusing on so-called “junk silver,” take a look our special report: Though it’s Called “Junk Silver,” the Profits Aren’t Trash.
- If you’d like to understand just why silver is suddenly in the headlines alongside gold, we’d like to recommend: Silver is Emerging From Under Gold’s Shadow.
- If options are part of your personal portfolio strategy, here’s a piece that ran in October that deals specifically with using options to profit from silver: Three Ways to Play the Silver Rally – While Limiting Your Risks with Options.
- Finally, here are two pieces from September and October – a “Buy, Sell or Hold” piece on Silver Wheaton, and a detailed strategy piece that caters to more-experienced investors: Investing in Silver: Three Ways to Profit From the Projected Breakout.
ETF Daily News Notes Some Silver Related ETFS: iShares Silver Trust (NYSE:SLV), ETFS Physical Silver Shares (NYSE:SIVR), ProShares Ultra Silver (NYSE:AGQ), PowerShares DB Silver (NYSE:DBS), ProShares UltraShort Silver (NYSE:ZSL), UBS E-TRACS CMCI Silver TR ETN (NYSE:USV), Global X Silver Miners ETF (NYSE:SIL).
[Editor’s Note: Peter Krauth, a frequent contributor to Money Morning, is the editor of the Global Resource Alert, a private advisory service that focuses on precious metals, energy commodities and other natural-resource-related topics. Krauth spent two decades as a market analyst and portfolio advisor, and has covered all the commodities sectors, including gold, silver, coal, alternative energy and agriculture. He even makes his home in Canada – to be closer to the action. And several of his recent predictions have generated a genuine Internet buzz.
Peter Krauth is a highly regarded market analyst and expert in metals and mining stocks, with a special expertise in energy and resource-related investments. Using the contacts and connections amassed during years of covering commodities investments, Krauth scours the globe to research all commodity sectors, including precious metals, base metals, fossil fuels, alternative energies and agriculture. A one-time portfolio advisor having earned an MBA in finance from McGill University, Krauth is headquartered in resource-rich Canada, where he now focuses exclusively on his research.