Tuesday, June 2, 2009

Industry analysis. Gold/Silver. Show me guy who want sell gold

Gold Analysts Not Expecting Inflation This Year. They expect avarage price 918$. In generaly i am agree with them. But markets are driven not by facts but by expectations. They dont see inflation in 2010 now, but if market will grow up more we could expect increase infaltion even in 2010.
Nevertheless, the funds continue to pile into metal. Hedge funds and other large speculators increased their net-long position in New York gold futures last week, by 7.7% over the previous week, according to CFTC data.
Hedge fund manager John Paulson recently bought tons of gold and gold miners.
There is the gold/silver price ratio. For most of history, this ratio has averaged roughly 15:1. However, currently, this price ratio has swung to an extreme ratio of nearly 70:1. This alone should make silver an automatic first choice among investors.
Here we see from what places we demand on silver.
Ratio between gold and silver can be reduced as silver is not only precious metal but also its using for industrial needs. Two nonprecious metals reasons for Silver's upside: It is an Industrial metal which means greater usage in the years to come and its supply has been disrupted since it is a byproduct of the mining of other Base metals whose prices have to go up before they reopen.
My conslusion
We have big inflations expectations and doubtful market growth. If no risks will be converted in to reality we will see continue of market growth and gold growth too. Market will growth by better fundamentals, gold will growth by inflation expectations - if economy is began to recover - inflation wiil begin growing quick. If we dont see real economic recovering now, we will see second wave of recesion. It will mean more money to print again, bigger inflation in future, so market in this scenario will go down again, but gold after some down move, will grow even more quickly. For our fund we wanna to acumulate positions in gold, silver, stocks which are producers of commodities. The focus of our fund will be on silver.

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