Eric Sprott: Silver is the investment of the decade

Renowned fund manager Eric Sprott forecasts a silver price explosion in this decade.Silver will become the investment of the decade. The continued monetisation ofoutstanding debt by central banks would result in an acceleration of the global capital flight into safe havens such as gold or silver.

According to Sprott, it is entirely possible that we will see gold at $12,000 per troyounce, after the yellow metal took out $1,764 per troy ounce. Sprott is in line withrenowned fund manager Marc Faber, who also said that gold was still “dirt cheap” attoday´s prices. Sprott even expects silver to be a 30-bagger from its current pricelevel. Historically, the gold/silver ratio was at 16:1. The gold/silver ratio shows howmany ounces of silver are needed to buy 1 ounce of gold. If one assumed that goldwas traded at $12,000 per troy ounce in the future – with the gold/silver ratioovershooting and sinking to 10:1 – silver´s price target would be at $1,200 perounce, Sprott said.

Sprott added that shares of mining companies in the gold and silver sector were stillworth buying, with the precious metal mining sector finally starting to outperformother primary producers.

Clive Maund, on the other hand, was less enthusiastic on the silver price. He expectsthe white metal to face a similar decline to the one it suffered in May . Technicalindicators suggested that investors should exercise caution in silver investments.Previous calls of a similar nature have proven to be short-sighted to say the least, butit is true that silver is extremely volatile and should therefore be handled with care,especially when dealing with ”paper silver” and leveraged financial instruments. – by Goldmoney