Nickel, silver score big gains in the third quarter

The silver-to-gold ratio, or the amount of silver ounces to one ounce of gold, fell to lows around 32 in 2011 and peaked around 95 in July of this year—the highest ratio since 1991, says Peter Spina, president of silver news and analysis provider SilverSeek.com. “If we see the ratio just move back to the mid-point of the two extremes over the last several years, silver should be in the low $20s and thus still looks undervalued here from a gold perspective.” During its pullbacks, silver has shown some “great support” under $18, though it could find difficulty getting into the lower $20s in the short term without gold prices reaching new highs, he says. In the coming months, Spina says silver could build a strong base around $18, with $20 to $21 as the “next major technical resistance,” and he’d be a buyer of silver at $18 or less.