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Monday, December 31, 2007

Silver Forecast for 2008

2008 Is Silver’s Turn to Shine

Global mine production in 2006 was 663 million ounces, while total silver demand was 850 million ounces, according to analysts at GFMS and the Silver Institute. In fact, for the last decade, demand has outpaced mine supply by over 100 million ounces per year. And it’s not just investors and jewelers who are using silver. Everything from cars to flat-screen TVs to radios uses silver. And this industrial demand results in silver being used and not recycled.

Where does the silver come from to make up the difference? From above ground silver inventories – central banks and other stockpiles. But those inventories are getting very low. Take a look at this next chart …

In fact, above-ground inventories now could meet less than five months of global silver demand – down from 110 months in 1950 or 40 months as recently as 1990.

So how high is silver going in 2008? Let’s look at a chart.

The same technical analysis that gives me a target of $915 on gold gives me a target of $25.50 on silver. That’s a 70% rise from recent levels!

Now, this kind of technical analysis doesn’t give us a time frame for this move, but again, there are powerful forces lined up to push silver higher. I think this move could be sooner than Wall Street thinks.


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