23 Feb Silver at $50 Soon
Silver prices are heading to at least $50 in the near future if all the evidence is to be believed. Right now silver is the most undervalued asset anywhere in the world markets. A recent video by Mark O’Byrne, research director at Goldcore, and a precious metals expert, gives us a very clear picture of why silver is going to outperform gold as well as stocks, bonds, and property over the next couple of years. I have made a summary of the main points for your convenience but you can look at the video here: Silver to $50 An Ounce
From the graph we can see that the silver price went up to just below $50 in December 1980 and again in April, 2010. Since 2001 silver has gone up from below $5 to nearly $50 in 2010 which is about 10 times. If one look at the chart it also becomes very clear that one has to time the selling of your silver very carefully to ensure you take profits at the right time. From my trading experience I have developed a strategy that I will share with you to make sure you bank the profits that is coming in silver. The silver price has been forming a base at around $14.50 and has now started to move up. If the price breaks above $19.70, we should see a run up to $21.00. From here we might see a pull back and consolidation phase. Once the price starts moving up again and breaks $22, the price should go up to $35 and then $50.
Silver is fundamentally under valued an has been for quite some time. Historically, this imbalance has to reset. To understand this imbalance, we have to look at the gold/silver ratio which has been used by investors for more than a hundred years to determine which metal will perform the best. This ratio comes from geological surveys many years ago that determined that there was 15 parts of silver to every one part of gold in the earth’s crust. The ratio therefore should be around 15:1. Currently it is around 87, down from an all time high of 99 a while ago. The general consensus among the gurus is that the ratio in modern times should be just below 50. This strongly indicates that the price of silver has to go up to at least $50 or even $100 to catch up with gold. The important aspect of silver as can be seen from the above graph is this ………. if silver starts to move, it really moves fast! If you are not in already, it will be very difficult to get in. I have previously mentioned that the silver supply side is not looking good. Supplies are falling as well as the ore grade of the mines are declining sharply. This is already leading to a silver supply deficit in the world which is only getting worse. Silver usage for solar panels in 2010 was nearly zero as opposed to a massive 80.5 million ounces today and increasing every month due to climate change. In one of my previous articles I mentioned that the silver supply deficit for 2019 is already at 29.2 million ounces and getting worse. Worsening financial markets will slow down the production of industrial metals. As silver is mostly a by product of these metals, it stands to reason that the silver production will also decline.
As investors we always have trouble deciding what information is reliable enough to act on and what is not. We are bombarded with new information every day and it is really difficult to keep track. I always rely on hard data to try and see what is going on. The data always gives one the true picture of what the smart money is doing. If ever there was data that tells us what is happening in the silver market, the included graph tells the whole story in one clear picture. This graph reflects the total published silver repositories of mutual funds and ETF’s in ounces. Even us mere mortals can see that even though the silver price was falling recently, the mutual funds and ETF’s have been buying silver at an ever increasing rate. In fact, the silver inflow into these funds are the highest it has ever been. The smart money is moving into silver guys.
Now is the time to stock up on silver bars and silver coins. Once the prices start moving you will not be able to get in. In 1980 and 2010 the world ran out of silver for two whole months. You could not buy silver anywhere! Check the prices here now.
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