The rise and rise of silver and gold

Now at around $42 an ounce, the silver price is not far off its 1980 record of just under $50. But gold is also reaching record highs. So which is the better bet for investors?

"Silver's hot," says Eric Streiner, manager of New York coin dealer Stack's. All the world's top mints are selling silver coins at a record pace. Investors are also pouring into silver-backed exchange-traded funds, whose holdings are at unprecedented levels. As the silver market is small around one tenth the size of the gold market, says Investors Chronicle it's no wonder it has rocketed, gaining around 120% over the past year. The price has more than quadrupled since 2008. At around $42 an ounce, it is now not far off its record of just under $50, set on January 1980.

Gold topped out at $835 an ounce in January 1980 and is now close to double that record at about $1,480 an ounce. Over the past year it's gained around 30%. Silver, having lagged gold during the financial crisis, has made up for lost time. The gold-silver ratio (gold's price divided by silver's, showing how many ounces of silver are needed to buy an ounce of gold) has slid to a 28-year low of 36. It has been above 60 since 1985.

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