Buy Stocks as Silver Rally Calls Economic Rebound: Chart of Day

The Standard & Poor’s 500 Index may surge 32 percent by the second half of 2011 as a rally in silver, the precious metal most used in industry, signals a pickup in economic growth, according to Mirae Asset Securities Co.

The CHART OF THE DAY tracks the gold-to-silver ratio, a leading indicator for the U.S. equities gauge, according to South Korea’s biggest seller of mutual-fund products. Gains in the price of silver relative to gold since October 2008 will continue, driving the ratio below 50 by early next year, from 61 now, said Mirae Asset analyst Lee Jae Hun. If history is any guide, the index will subsequently rise to 1,500, he said. The ratio is inverted on the chart.