C’mon Shae, what about silver?
Alright, I’ll admit it. I’m guilty.
I rarely talk about silver.
And I should.
Silver — more so than gold — is a crucial metal for modern society.
In your phone, laptop…in fact, pretty much in any electronic device you own.
Anything with a circuit board will have a small component of silver.
Your microwave, washing machine and oven.
All those new, shiny trucks driving past you on the freeway? Yep, their circuit boards contain silver too.
And while silver oxidised batteries have been around for some time, the electrical car revolution could see them become more popular in passenger vehicles.
Silver is an industrial metal.
Our tech revolution wouldn’t work without it.
Yet no one covers it…
Or, as one reader put it to me the other day, ‘C’mon Shae, what about silver?’
Well, I’m glad you asked…
Gold goes up — silver goes nowhere
Silver is easily forgotten about.
At roughly AU$22 per ounce, you can buy two ounces of the stuff and get change from a 50 buck note.
And let’s be honest, the moves in gold are MUCH more exciting than moves in the silver price. Gold can jump US$20-30 per ounce in a day.
Heck, there’s been times when it moves US$100 in an hour.
But silver would be lucky to move a buck or two in response.
The lack of volatility — or excitement — is one of the reasons why many people never cover it.
Yet silver is a critical factor for our tech-driven lifestyle.
Without it, we wouldn’t have all our fancy tech gadgets.
Not only that, but throughout history, silver has co-existed with gold as a store of wealth.
The use of an official silver standard — that is, a widely accepted, government-backed form of money — goes back to the Athenian empire.
Bolivia, India, Spain, China and Germany have a history of silver standards.
At the start of the 18th century, Isaac Newton introduced a mashup of the gold and silver ratio.
Newton popularised the concept for England to accumulate gold to protect wealth, while allowing silver coins to circulate as the money supply.
Hence the name ‘pound sterling’.
Just like with gold, silver is money too.
But here’s the thing.
While the value of gold is up 6.5% in the past six months, silver has gone nowhere.
In fact, in the same timeframe, the price of silver per ounce in US dollar terms has dropped 6 cents…
And that is why silver could be presenting you with a buying opportunity today…
Ready for the silver rally?
Right now, silver is at a multidecade low compared to the price of gold.
And if history is anything to go by, we could be on the precipice of a new silver rally.
By that, I mean the gains in silver could be bigger than the gains in gold.
Let me show you what I mean.
The gold to silver ratio is the highest it has been in almost 20 years…
The gold to silver ratio is simply how many ounce of silver you can buy with one ounce of gold.
In other words, it’s a useful tool to look at how cheap or expensive silver may be in relation to gold.
As we speak, the gold to silver ratio is the highest it has been since 1993.
Source: Stansberry Research
Now, the last time the gold to silver ratio was above 80…the silver price made extreme gains in a short period of time.
Have a look at this…
Three times silver has outperformed gold
Source: Stansberry Research
Over the course of 1993, 2003 and 2008, the physical price of silver busted out considerable increases for investors.
In all three cases where the gold to silver ratio was near or above 80, silver trumped any gains made by gold.
In 2003, when the price of silver jumped 26%…the price of gold only moved up by 14%.
Then in 2008, when silver moved an incredible 81% higher…gold gained only 44%.
And history may be about to repeat itself.
Given that the gold to silver ratio is above 80 for the first time in almost 20 years, this leads me to believe that silver is going to surprise investors with a rally.
Silver is looking cheap.
Get ready for the surprise move.
Until next time,