Gold and silver run not done yet

As gold rises so too does silver and both precious metals are expected to climb higher in the coming months, according to new estimates from a couple of Canadian analysts.

At Canaccord Genuity, Steven Butler raised his silver price to US$30 from US$25 per ounce, reflecting a lower peak gold:silver ratio of 50:1 from 60:1 previously. His peak gold price forecast remains unchanged at US$1,500 per ounce. His peak gold price target remains US$1,500 per ounce.

“Our rationale for a lower peak gold:silver ratio is supported by historical analysis, which suggests that silver outperforms during periods of gold price
rallies,” he said.

Canaccord also raised higher its target prices for all silver equities under coverage and upgraded to Speculative Buy both MAG Silver Corp. and Gammon Gold Inc.

Over at CIBC Capital Markets, Barry Cooper raised his gold and silver forecasts through 2012.

He expects gold to hit US$1,225 an ounce in 2010, US$1,600 in 2011 and US$1,700 in 2012. Silver will reach US$20, US$28 and US$30/oz. in 2010, 2011 and 2012 respectively.

“The supply of money is beating out the supply of gold, driving prices higher, he said in a note to clients.

He said this trend will likely continue amongst several major countries of the world for the foreseeable future and regions where the dilemma is less pronounced will likely purchase gold to insulate themselves from trouble.

From a stock perspective, Mr. Cooper has a bias towards smaller names which represent combinations of growth, value and budding production from new sources. Some of his top picks include CGA Mining Corp., Pan American Silver Corp., and Alamos Gold Corp.