Gold Silver Ratio And China Fact or Fiction

by Goldeye
(Toronto, Canada)

Rumor has it that China will circumvent the U.S.led embargo on Iranian oil by purchasing in gold (not US$) beginning July 1. If true, gold will not only get a credibility boost as it will be regarded as a legitimate currency, but this purchase of Iranian oil by China using gold will result in increased demand. This undoubtedly will increase the per/oz. price of gold and in turn a

higher per/oz. price for silver. Now this is where it becomes very interesting for silver-- even if only by default, the silver price would rise to at least around the current ratio to gold (54:1). But this could start in motion a supply/demand situation where the silver to gold ratio gradually contracts toward the historical 17:1 ratio. Of course we have other potential fundamental influences (i.e. continued low interest rates, further quantitative easing for example) that would also positively influence the prices of gold and silver. Silver imvho is really the one sure thing going forward. P.S. keep up the great work!


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