Silver @ 22$ - 33333 Mcx

It's been a good week for silver, with the precious metal gaining 4% to $21.97 an ounce. Deflationary fears and the use of QE as an instrument to stimulate growth and devalue the US dollar have encouraged investors to diversify into assets that will protect their wealth. A drop in US consumer confidence and weaker-than-expected Richmond Federal Reserve Manufacturing Index didn't help the situation, as it gave the Fed more ammunition to begin another round of QE. The ensuing broad decline in the US dollar pushed silver to a 30-year high this week. While silver is often called the poor man's gold, there are a number of factors that may see silver outperform its more illustrious partner in the coming years. Unlike gold, silver is used extensively for industrial applications; as a matter of fact around half of silver demand is consumed for this reason. These applications include silver alloys used in batteries, electrical applications that require superior conductivity such as TVs and microwaves, and as a catalyst for chemical reactions. A large amount of silver is used in photography and of course, for jewellery and silverware. In addition to these wide applications, silver is also becoming the metal of choice to use in solar panels for its reflective ability and excellent conductivity. With China at the forefront of solar technology, the country is consuming more and more silver and silver exports have fallen 64% as a result. China is the world’s third-largest producer of silver and accounted for almost 13% of global production in 2009. Thus a reduction in China's exports will suppress the availability of silver globally, which in turn supports the metal's value. Besides the physical appeal of silver, the gold-to-silver ratio suggests that silver could make further headway and outperform its more expensive cousin. The gold-to-silver ratio is currently around 60, whereas in the past it has averaged around 55. Historically, this ratio tends to be mean reverting, which suggests silver has some catch up to do with gold. The popularity of gold has seen it rise to all-time highs, but as investors begin to worry that gold has become too expensive, they are beginning to take a closer interest in silver.