While prices of gold don’t necessarily affect silver prices or vice versa, history has demonstrated that when gold rises or falls, silver usually follows suit.

This time around, silver has failed to match the gains that gold posted in recent months, spawning a widespread believe that silver is poised for a bull run. Such factors as a decline in supply and a weakening U.S. dollar have buttressed that bullish belief. And so has the fact that China’s government is strongly encouraging that country’s residents to buy the white metal.

With Beijing’s plan to inject $587 billion (4 trillion yuan) into China’s economy, and a growing desire to diversify away from the U.S. dollar as its key reserve currency, the Asian giant could increase its reliance on such precious metals as gold and silver – especially if global inflation takes hold.

China’s central bank “could use gold, silver or even a basket of

Silver/Gold Ratio Reversion Adam Hamilton

While wreaking its unbelievable destruction, last quarter’s financial-market panic certainly showed no favoritism.  Launching from ground zero in the financial stocks, shockwaves of selling blasted out through the entire market landscape.  Everything speculators once loved was left in ruins, including silver.

Back in July 2008 when the financial markets remained oblivious to the tsunami of fear approaching, silver averaged $18.07 on close.  But by November when popular stock-market fear reached a fever pitch, silver only averaged $9.81.  A 45.7% loss on the monthly averages, not merely the extremes, in just 4 months was enough to test the faith of even the most dedicated long-term silver bull.

But even at the very bottom when things looked the bleakest,

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This from Reuters, London:

Gold fell nearly 2 percent in Europe on Monday as investors took profits after recent gains, amid disappointment the metal had failed to beat resistance near $930 an ounce last week.

Spot gold slipped to $895.65/897.65 an ounce at 1446 GMT, down from $911.70 in New York late on Friday. Earlier it touched a low of $893.15.

U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange fell $16.30 to $897.60 an ounce.

“There has been some profit taking and disappointment we couldn’t break through $930, even with strong demand from ETFs,” said Commerzbank senior trader Michael Kempinski.

Signs of a recovery in

Gold was firmer on Monday, tracking a climb in crude oil prices on the back of burgeoning tensions in the Middle East, although it retreated from earlier highs as oil gave up some of its gains.

Weakness in the dollar is also supporting gold, while a slide in the value of sterling to a record low versus the euro helped to take the precious metal to a new all-time high when priced in British pounds, according to Reuters data.

Spot gold reached a session high of $889.55 an ounce, its strongest level since Oct 10, but eased to $875.20/877.20 by 1422 GMT from $866.80 late in New York on Friday.

In sterling terms, gold hit a new all-time high of 605.07 pounds an ounce, up from 592.40 pounds on Friday. U.S. gold futures for February delivery climbed $6 to $877.20.

“Gold is following

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Gold slipped in Europe on Thursday as the dollar firmed against the euro ahead of an expected rate cut by the European Central Bank later in the session, and oil prices fell $1 a barrel.

Investors are eyeing rate cuts this session from both the ECB and the Bank of England and key U.S. jobs data on Friday for clues as to the future direction of trade.

Spot gold slid to $769.25/771.25 an ounce at 1000 GMT from $772.60 an ounce in New York late on Wednesday.

“With a lower euro-dollar and lower oil, gold is pressured a bit,” Commerzbank senior trader Michael Kempsinki said. “Around $735, $750, we should see some good buying interest coming into the