Colorado Springs - All that glitters is not just gold, with
prices for silver also expected to strongly rise within the year due to a
worsening economic landscape.
Silver, the second-most popular precious metal, has
historically traded in tandem with gold prices, and in the past 12 months its
price has more than doubled to roughly $40 an ounce.
"What we're seeing in prices of silver now is a
completely natural response to the economic malaise," John Smith, chief
executive of Silver Standard Resources, said on Tuesday at the Denver Gold
Forum, one of the largest gatherings in the world of mining investors, analysts
and executives.
"This is not a sector to rent. This is a sector to
hold," Smith said. "What we're seeing in the world is not an issue
that going to be solved quickly."
Economic concerns in the United States and Europe, as well
as political unrest in the Middle East, were all cited as contributors to
silver's rise.
Silver is cheaper than gold, has scores of uses that gold
does not - it is the best metallic conductor of electricity - and there's about
15 times more of it in the earth's crust than gold.
"I'm very bullish on silver, and I think we'll see it
at $50 (an ounce) within the next six months," said Silver Wheaton Corp
CEO Randy Smallwood said.
"I'm very bearish on the US dollar," he added.
"As long as we continue to value silver in terms of US dollars, I see
continued opportunity for silver to keep growing."
Some silver miners are going so far as to link their
dividend payouts to silver's price, mimicking a move by some gold miners.
Hecla Mining became the latest silver producer to take such
a step on Tuesday, saying that for every $5 increase in the price of silver it
would increase its quarterly dividend by a penny.
Gold prices, also, are expected to jump, with many
executives expecting them to breach $2 200 an ounce from their current levels
around $1 800.
"So much of what happens to silver happens to gold, and
with gold being such a safe haven there's a crisis of confidence," said
Coeur d'Alene CEO Mitchell Krebs. "Investment demand is going to continue
on the gold side and translate into the silver side."
Steve Busby, chief operating officer at Pan American Silver
, said a weak euro and dollar are fueling the silver price jump.
"I personally believe that the futures of the world hard currencies looks bleak, and this will continue to drive silver prices upward," Busby said.
Busby is not alone, with many silver CEOs seeing their
product as a sure defense against whatever comes down the economic pike.
"When you look at the critical mass that's trying to
solve these issues, it just really highlights the fact that perhaps there isn't
a solution," Silver Wheaton's Smallwood said.
"Maybe the only way you can solve this is devalue your
currency down to the point where people are just losing faith in fiat
currencies."