Tuesday, October 25, 2011

How China Will Drive Silver To $250/oz

Once upon a time, the Chinese government forbade ownership of all precious metals.

But now, the ban has been lifted. In fact, China just introduced silver bars for investment. And now, state-run China Central Television (CCTV) is running a campaign encouraging the population to invest in silver.

That means there are over a billion potential new silver investors hitting the market. This is especially significant when you consider the average savings rate in China is 30 to 40%.

But the flood of new Chinese silver investors isn't the only factor driving up silver prices. The increased use of silver in everything from solar cell technology to medicine is pushing up prices as well.

Read on to discover exactly why silver will make savvy investors rich in the year ahead… and find out the one stock to buy now to take your portfolio to new highs.

Chinese Demand For Silver

Take a second to think how much of an impact this will have on the silver market - the sheer amount of people, and at such a high rate of savings.

Then you factor in Chinese demand for things silver is need to make - cell phones, computer, batteries, silverware and jewelry. China's silver consumption already accounts for 70% of the global total of industrial use, and its middle class isn't even close to reaching its spending potential.

What's more, those aren't the only reasons analysts are predicting silver prices can reach as high as $100 this year and $250 by 2015.

This free report outlines all the reasons silver is going to continue its ride to another record. It also gives a handful of ways to invest in silver.

Demoting The Silver-Gold Adage

China's impact on the silver market isn't the only thing catching the attention of silver analysts. The silver-gold ratio tells a compelling story about the price of silver. Put simply, the ratio means how many ounces of silver it takes to buy one ounce of gold. Historically, that ratio has been about 15-to-1. Right now, that ratio is hovering around 59-to-1.

For silver to 'correct' by returning to its long term silver/gold ratio of about 15, gold at $1,000 means silver should be priced at $66 already.

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