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Posted on 28 April 2011 | 12,348 views

Silver Spot Price Above $150/oz Dangerous

Jim Rogers sees the silver price going substantially higher, but is concerned about the pace at which the price of silver has risen over the past year. In an interview with the Times of India, Rogers stated that “I own silver, but if it keeps going up, it could turn into a problem if it goes parabolic” as the current run-up in silver prices is excessive.

This past Monday — April 25, 2011 — the price of silver reached a new 31-year high of $49.82 per ounce, just 1% from its $50.35 all-time record high reached in 1980 as the Hunt Brothers attempted to corner the market.

With silver appreciating more than 150 percent over the past year — and 50 percent in 2011 alone — analysts said the precious metal is in a “Silver Bubble” and set for a pullback. They predict silver will fall to $34 US an ounce in the next 12 months. Jim Rogers said if this upward trend continued and silver hit $150 this year, it would leave the precious metal looking vulnerable, and force him to consider selling his investments.

Rogers, the legendary investor who along with George Soros founded the Quantum Fund in the 1970s, has been one of the most prominent commodity bulls over the past decade. When asked for a “Silver Price Target” — Rogers responded that “I do not have any prices in my targets” — “I own silver, but if it keeps going up, it could turn into a problem if it goes parabolic,” he said. Jim Rogers is not known for market timing but his price targets are very accurate.

The present price bubble could persist long enough to move near $55/oz — Jim Rogers explained there is no question about how fast silver has climbed, but remember, silver is still 10% below where it was 31 years ago. He bet many of you do not know many things that are 10% below where they were 31 years ago.

The UBS analysts are not alone in calling the run-up in silver prices excessive. There is no shortage in “Supply of Silver” — the only difference now is that silver held by pure investors, not by people who need to make something with it.

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