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Reuters poll has silver outperforming gold

A Reuters poll has silver outperforming gold through 2008. I see no problem with that forecast. Historically, silver has always outperformed gold in precious metals bull market; therefore, in any prediction over eighteen months you can expect silver to turn in a bigger percentage gain than gold.

The Reuters poll forecasted gold to average $681 in 2008; I suspect that number to be low considering the geopolitical state of affairs. Further, sometime in this presidential campaign, the candidates will have to start talking about the financial state of affairs in the U.S., which, of course, are not good. In fact, they are very bad, but public concern has been diverted because of the war in Iraq.

Of interest to me was this prediction:

Silver is seen stronger than other metals, with the average 2007 price surging 14 percent to $13.30 an ounce. But it is forecast to fall to $13.00 in 2008, against its spot price of $12.95 and a 25-year high of $15.17 in May last year.

Frankly, I consider it ridiculous to attempt to predict precious metals prices that exactly, especially silver. In 2005, when silver was trading at $7, where were the Reuters polls showing $15 silver in 2006?

Such predictions are made because a large number of investors want to hear them. By 2008, silver could easily be $18 to $20 because of geopolitical events or recognition of the dire financial state of affairs in the United States, but to say that it will be $18.27 would be ridiculous.

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