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Has Silver Topped?

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Silver has lost some of its sheen.

Today, the iShares Silver Trust (SLV) is down 3%. Of course, this bout of profit-taking comes after the white metal has enjoyed a rip-roaring run. The SLV is still up nearly 62% from a year ago. The stocks of mining-related companies have also benefited: Pan American Silver (PAAS) is up 54% in the past 12 months; Silver Wheaton (SLW) is up 120%.

Some strategists believe the rally will continue into 2011. Frank Holmes of U.S. Global Investors, for instance, recently explained that silver, like gold, has yet to break through its inflation-adjusted highs. He even gifts silver coins to employees, believing that the pieces of shiny metal will retain value better than paper currency.

The allure of silver is easy enough to understand. Your neighbors invest in the metal, as they do other physical assets, as a hedge against inflation. But the “poor man’s gold” also has many industrial applications: it’s used in everything from computer keyboards to automobile dashboards.

Still, while acknowledging the attractions of silver as an investment, we couldn’t help but feel a little hesitant when we came home to our apartment here in Gotham this week and discovered a letter in our mailbox from an outfit called “Investment Rarities Incorporated.”

This Minneapolis-based company – which bills itself as the country’s largest coin dealer - offered us a free one-ounce Silver Eagle coin. All we had to do in exchange for this money-making gift, apparently, was promise to read their 12-page report called “Silver Unleashed.”

“We believe that silver offers such a great opportunity that we will give you a valuable one-ounce Silver Eagle if you agree to read our free report on silver,” the company told us.

Interested? Call 1-800-328-1860
POSITION:  No positions in stocks mentioned.