Silver beats gold for first time since 2006

Silver’s biggest discount to gold in 13 years has investors betting on the best annual return for silver since the Hunt brothers’ bid to corner the market in 1979.

Money managers are buying precious metals as a refuge from the 47% drop in the Standard & Poor’s 500 Index in the past year and growing concerns that Treasuries will fall as the US government pledges as much as $9.7 trillion to revive the economy.

While gold will rise 25% this year, silver may jump 58% to $18 an ounce, said Philip Klapwijk, chairman of London-based research company GFMS Ltd.

“Silver will have a nice catch-up rally,” said Peter Sorrentino, who helps manage $15.5 billion at Huntington Asset Advisors in Cincinnati.

“There’s a flight to precious metals as a storehouse of wealth. Silver got left behind and it’s been closing in quickly but there’s still a performance gap,” he said.

Gains would benefit Fresnillo Plc, the world’s biggest silver producer, besides Hochschild Mining Plc of Lima and Vancouver-based Pan American Silver Corp.

Export revenue would climb in Peru and Mexico, the largest silver-mining nations.

Eastman Kodak Co faces higher costs for photographic materials.
The last time silver did better than gold was in 2006. Bloomberg