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Saturday, June 12, 2010

Citigroup (NYSE:C) Sees Silver Outperforming Gold

Over the medium term, Citigroup (NYSE:C) says silver prices could outperform gold prices, as industrial demand for silver continue to rise.

Citigroup analyst David Thurtell said this, "Gold is likely to encounter repeated resistance at the US$1,250 mark over the coming month. The seasonal low period for buying in India is upon us, which will take some of the heat out of the market."

Over the six to twelve months, Citigroup thinks silver could reach $20 an ounce.

I'm not that impressed with the idea Thurtell is making his decision in what appears to be seasonal fluctuations in demand from India, which is high during their seasonal wedding periods.

To tie the existing gold market into India gold jewelry demand doesn't compute, and doesn't account for any of the factors as to why gold prices continue to rise.

That being said, the possibility silver will rise higher than gold in the medium-term is definitely a possibility, although it has nothing to do with whether the people of India are buying gold jewelry.

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