Silver: the chance of a lifetime

Lately, we've seen precious metals take a serious dive. The start of the year has certainly not been good for those who have put their money in mining companies, including the undersigned. Gold looked destined to surpass its previous peak at USD 650, but failed to do so and lost 6%. Its usually more volatile 'little brother' silver had showed a sluggish performance since early December and has now lost another 9% since the start of 2007. Knowing that silver is widely expected to be the best performing metal in the coming years -simply based on the laws of supply & demand- I myself have been looking to diversify and invest part of my money in this metal. Let's have a look at the below chart: This chart is the price of one oz of gold divided by the price of one oz of silver. What the chart shows is that around 1 December at USD 150 and with the RSI showing that silver was overbought compared to gold, the latter was the better option to buy. However, now we are at a stage where the RSI has fallen below 40, showing a good chance to buy silver. The same happened early October, when silver started to move up from USD 10.80 to USD 14! Silver itself looks quite good as well with the RSI showing a slight oversold status in the March 07 future chart. To summarise: silver has stayed behind gold since early December and silver itself currently shows an oversold status. Hence, enough reasons for me to take a long position in silver today at USD 12.05.