*Dow Theory Letters, by Richard Russell, February 11, 2008
“What about silver? During hard times silver is an industrial metal. But during inflationary times, silver joins gold and it becomes a precious metal. The ratio of silver to gold varies over the years. As recently at May, 2003. one ounce of gold would buy 80 ounces of silver. In November of 2006 that ratio dropped to 46. One ounce of gold would buy 46 ounces of silver. From there, the ratio moved in favor of gold again — one ounce of gold in December 2007 would buy 57 ounces of silver.
But last December the situation changed again. The chart below shows the change. Starting on December 17, silver began to out-perform gold. At last Friday’s close, one ounce of gold would buy only 53.9 ounces of silver. I expect this latest trend to continue.”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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