peter j. cooper argues that silver is cheap, and especially cheap compared to gold:

The closing price for silver this week is $13.70 while gold is at $941 per ounce. Precious metal prices are clearly in a rally, and a fairly gentle and sustainable one, rather than a price spike.

And yet silver is out performing gold. By my approximate calculations silver has risen about four times faster than the yellow metal over the past few weeks.

Downside

Of course, we have also seen this volatility work in reverse as recently as last spring. Then silver suddenly lost more than half its value while gold proved more resilient and rebounded more quickly.

However, the idea that silver will lag along way behind gold - due to its status as an industrial metal hit by the recession - and then catch up at sometime in the future, looks disproved.

Indeed, the message is surely that if you think the current gold rally has further to run - and the long list of financial experts jumping on this bandwagon now appears worryingly like a consensus view - then you might do much better to buy silver instead.

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