Gold closed up $1.80 at $528.10 after hitting a high of $540.20. Silver closed down .22 at $8.77 after hitting a high of $9.26. Platinum closed up $14.00 at $1,009.

After hitting $9.26 on monday silver suffered an onslaught by the paper players which dropped the PM by more than a dollar.  Today there seems to be a rebound with silver now up .19 for the day at $8.55.  The last time the shorts got this nervous silver dropped more than $2.00 in two weeks.  If this rebound holds it will be a large plus for silver.

Gold closed down $3.20 today at $503.00 and is now down $23.30 for the week. Silver closed up .18 at $8.54 but is still down .45 for the week.This rebound in the silver price may be shaping a new bottom.

RENO--(Mineweb.com) Silver Institute Chairman Phil Baker, President and CEO of Hecla Mining, said the Washington, D.C.-based silver industry association's 2006 legislative priorities will emphasize the silver ETF, and promoting federal capital gains treatment of precious metals investment.

In a recent interview with Mineweb, Baker declared that "the bottom line is that we are looking for any mechanism for people to be able to invest in silver. The ETF overcomes some of the other problems going into the market now. It's very difficult, very expensive for someone to get silver, but they will be able to do that through the ETF."

Since the gold ETF may be the fastest-growing ETF ever, Baker said that "I would not be surprised for silver to do very, very well" as an ETF. He noted that silver producers are supporting the silver ETF although "we realize that is it an alternative investment to our own shares."

Last June, Barclays Global Investors filed an initial prospectus for the first exchange-traded fund to reflect the price of silver bullion. Each share of the ETF would be equivalent to 10 ounces of silver. The only silver ETF being proposed in the U.S., the Barclays' application is still under study by the SEC.

"It's (the Silver ETF) not without some potential negative impact on the companies," Baker admitted. "But it's what's right for the shareholders to be able to invest in silver. Of course, what we expect to see happen is that people will make those investments, and the general investment demand for silver will rise."

During a recent silver discussion panel hosted by the RBC Capital Markets in New York City, Jeff Christian of the precious metals consultancy the CPM Group said some discussion is on-going regarding creation of a silver ETF in India. Meanwhile, Christian suggested that the conversion of silver products into bullion "will be a surprise" for silver markets, noting that semi-fabricators have already been making such a conversion.

On October 12th, the Silver Users Association issued a news release stating it opposed the silver ETF based on concerns that the investment product "could make silver too expensive or illiquid in the world market."

To allay the price-increase fears of manufacturers who use silver, Baker suggested that "the key is producing enough silver to meet the demand."

"The users of silver basically had a free lunch for a long time because of all of the silver that had come out of the government storehouses over the last 40 years because of demonetization of silver as a currency, as backing the U.S. currency and the Chinese currency," Baker declared. "In fact, the only government of size that has silver in inventories is India. That's like 120 million ounces; that is all of the government stock of silver in the world."

"What is going to happen is that all of that silver has come out, it has been consumed. You are now going to get more into a equilibrium between the users and the producers of silver. The alternative metals are so expensive, that on a relative basis, silver is inexpensive," he explained. "Even with the increases we have seen, in real terms, the price of silver is still very, very low."

Simultaneously, the Silver Institute is also working to convince Congress to legislate capital gains treatment for silver. Precious metals bullion investment products are now taxed at ordinary rates with a maximum rate of 28% due to their classification as a collectible under current tax code. "It's not fair," Baker declared. "It's an investment." The Silver Institute and other groups want precious metals tools to be treated in the same manner as equity and mutual funds regarding the long-term capital gains rate.

Baker also noted that the Silver Institute is encouraging technical papers and technical research and development. "That's the sort of marketing you need to do from the standpoint of industrial development," Baker explained. For instance, at a Silver Institute-sponsored conference in China last September, technical papers were presented by westerners to inform the Chinese market of uses for silver that could be used in the country, he added.

Gold closed down $9.30 to finish the day in NY at $493.80.  Silver closed down .23 at $8.31.  The ratio is now 59.42.

Popeye,
We need to get some silver lovers in here to keep you company!
Seth

Seth, that's my favorite but a lot of money could have already been made in Gold, platinum, palladium, copper and others as well.

Palladium has been in a very volatile flat market for the past few years, varying from about $145.00 to $320.00 over the past four years. In July of this year palladium was at $172.00 and today sits at $246.00. In January of 2001 palladium hit a high of $1,085.00.

I believe that all precious metals will have significant increases in the coming years with the highest percentage gain being in silver followed by palladium.

Gold closed up $10.10 today at $502.60 and silver closed up .14 at $8.47.

Silver continues to outpace gold.

Ratio: gold to silver

9-2-05---63.5
10-7-05--61.6
11-4-05--60.7
12-2-05--58.8
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The Tokyo, Bangkok and metals markets are open.

China should increase its gold reserve from 600 tons to about 2,500 tons in a short term and to 3,000 tons in a long term to cope with the versatile exchange rate risks, said Teng Tai, an economist of China Galaxy Securities Company.

Too little gold reserve would pose threat not only to China, but also to the global monetary system, Teng said.

China should increase gold reserve to reduce the foreign exchanges risks and diversify its state reserve with various goods, like gold and oil, in the long run, said Shen Xiangrong, director of the Shanghai Gold Exchange, China's sole gold market.

Today gold closed up $4.90 at $507.60 and silver closed up .16 at $8.70.

Silver and gold are on a tear this morning with gold up $8.30 at $515.90 and silver up .19 at $8.89.

Today gold closed up $6.20 at $513.80 and silver closed up .13 at $8.83.