Silver Wheaton's Smallwood "Would Bet on $50 Silver" in 2011

Gold has dominated the news in recent weeks. The precious metal has rallied over $250 since the end of June, rocketing from roughly $1500 to almost $1800. Yet, at the same time, the other precious metal—silver—has failed to keep pace. Silver went on an impressive run in April, setting a new nominal high of over $49 an ounce. In May, however, silver tumbled over 20%, trading at around $34 before bouncing back in recent weeks. (Silver now hovers around $40.) The fundamentals driving silver are not identical to those driving gold – silver has many more industrial uses. Still, both metals have been historically seen as safe havens in times of economic turbulence. Consequently, traders may wonder: why has silver not participated in gold's recent rally? Looking for insight into the silver market, Benzinga recently spoke with Randy Smallwood, the CEO of Silver Wheaton

. "Silver is the poor man's gold," Smallwood explained. "Usually, you see gold move first because bigger institutions favor it as an inflation hedge. But silver will catch up." Historically, the silver-to-gold ratio has been thought to be between 19-to-1 and 16-to-1. This represents the approximate ratio of the metals in the earth's crust. But in the modern era, the ratio has shifted tremendously. In the early 1990s, the ratio approached 100. However, since 2009, the ratio has been in decline. During silver's record run in April, the ratio dipped under 35 – a level not seen in over 20 years. However, with gold rallying and silver trading flat, that ratio has increased back above 45. Smallwood expects that to change. "I don't know if the ratio will ever get to that historical level," he said. "But I expect it to get back into the low 30s to high 20s." Back in June, Smallwood

with Dow Jones. In that interview, Smallwood said he anticipated silver prices would rally near $50 in the next two to three years. Benzinga asked Smallwood if he held that to prediction. "Two years? Absolutely. In fact, the way things are going, I would bet money we see $50 silver sometime this year." Smallwood stated that he believed that silver traded more as a precious metal than an industrial commodity. He expressed the belief that silver's industrial use actually helped it as a store of value, because nearly half the metal was effectively used up in industrial production. In recent months, some market commentators have speculated that the price of silver is being actively manipulated by major banks, including

. "The silver market is small, so it is open to manipulation," Smallwood stated. "We do consider it, but we are more focused on building a successful company [at Silver Wheaton]." Presently, spot silver is trading near $38.90, roughly 20% removed from its all-time high reached in April of this year.