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Many analysts make the point that the historic GSR has been nearer 15 than the current 62.5 (gold at $1250, silver at $20), but then the role of silver has changed dramatically since those days from being a true monetary metal to one which is driven more by industrial demand with precious metals overtones. The only time in recent years when the ratio got down to this kind of level was in 1980 when the Hunt Brothers were trying to corner the silver market and the metal reached a heady $50 an ounce. Given the fate of the Hunt Brothers this is a level unlikely to be repeated in the foreseeable future, but investors and analysts feel that the recent year average in the GSR of around 55 may be attainable again - and at the current gold price this would put silver at around $22-23 at the current gold price, which is a much more realistic target. And, of course, if the gold price does continue to move upwards as many are still predicting, then silver could be dragged up to even higher levels.....read on
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