It is no wonder that many people are considering gold to be a star performer now that it is hitting highs of $1675 per ounce. That said, silver should not be left out of the equation as this precious metal has gone from $34 per ounce to $42 per ounce. In percentage terms, silver has increased in value by 19 percent and gold has increased by 11 percent in value in terms of the silver price.
In real terms, this means that silver has outperformed gold by 60 percent. While this is not quite up there with the usual trend of double the performance of gold. Back in April, silver tumbled dramatically from almost $50 per ounce all the way down to $33 per ounce. Many investors felt at the time that this is when gold would begin to outperform silver in terms of percentage increases. Suffice to say that this simply did not materialize. The doom and gloom pundits were not rewarded with their pessimistic outlook on the performance of silver. Other people who took advantage and bought silver at the then silver price of $33 per ounce are once again smiling all the way to the bank.
This scenario begs the question whether silver will ever be worth more than gold. Certain quarters are of the belief that this can become a reality even though it sounds awfully outrageous. The fact of the matter is that if inflation ever hits the levels that it was back in the twenties in Germany, this could become a very real possibility. It could also happen in the event of an extremely lengthy period of inflation. Currently, gold is certainly the choice currency among precious metal investors. However it is possible that this might not be the case in time to come. Smart investors love to jump onto to winning performers and the current behavior of silver could see this happening in a big way.
At the moment, the demand for physical silver is rather high and there is not enough supply to satisfy the demand. This is at a time where there is artificial silver price suppression in the Comex futures market or silver market manipulation. Should the situation arise that the Comex price fixing is broken due to excessive physical demand then there is a very real possibility that the price of silver could soar to incredible heights. Gold investors would be tempted in a big way to switch to investing in silver and this would create an exponentially inflated silver price.
It is possible that the lack of interest in gold in this scenario could cause the weakening of the price of gold. At worst, it would cause the price of gold to remain stagnant. At some stage the silver price could actually bypass that of the price of gold, especially when hyperinflationary fears get hold of the public in general causing a stampede into precious metals. In such an instance the Average Joes are expected to buy more silver than gold, because silver is currently trading at much lower price levels than gold, making it more affordable to buy silver than gold.