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Silver next upswing
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Is Silver the Next Tesla?
Jeff Clark, Senior Analyst, GoldSilver.com
SEP 14, 2020
It’s no secret that one of the Nasdaq’s best performing stocks this year has been Tesla. Its meteoric rise, until recently, flashed dollar signs in the dreams of its investors.
Given silver’s historical volatility, a question dawned on me: could silver log a similar runaway price advance in the not-too-distant future?
It’s a fair question. Not only can silver be highly volatile, but potentially life-changing catalysts are staring us in the face. So let’s have a little fun and see if silver could have a comparable parabolic run…
The Core Reason for Silver’s Volatility
Long-time silver investors already know this, but the primary reason the silver price is so volatile is because it’s a teeny tiny market. It takes less cash coming in to impact its price than it does other assets, including gold.
And when we look at just the investment market for silver, it’s even smaller.
While the amount of silver that is refined into coins and bars fluctuates every year, only 6.15% of total above-ground holdings are estimated to be in investment form.
And yet investment demand has the biggest impact on its price, because other uses don’t fluctuate all that greatly and investment demand can. If demand for bullion products is low, the price historically has not moved much. If it’s high, the price tends to jump.
Last year 36.2 million ounces of silver went to coins and bars, below its long-term average, and the price rose a modest 15%. Investment demand has changed in a big way this year, and the spike sent silver on a relentless surge, rising 145% from its March low to August high.
And yet, Tesla stock has trounced silver this year. Here’s how it’s performed year-to-date, vs. silver.
Tesla stock rose as much as 468% at its peak last month, vs. silver’s advance of 60%. Both have since pulled back, but despite silver’s strong performance this year, Tesla has gained almost eight times more in price.
That’s reflected in the growth of their market capitalizations, too… using the figure of 3.512 billion ounces of above-ground investment silver (CPM Group’s estimate), you can see how silver’s “market cap” has grown this year as the price has risen (right bars). But Tesla’s market cap has exploded (left bars).
Even with the recent big pullback in its share price, Tesla’s market cap is 360% higher now than when the year began. That’s a huge jump for an individual stock in less than nine months.
And let’s not forget that this is ONE company… all above-ground investment silver (at $26) is currently one-quarter the value of Tesla.
This again highlights just how small this market is, and why it can be so volatile.
With that context, let’s get to the big question…
Is Silver the Next Tesla?
Yes.
How can I state that so confidently? For starters, because it’s already matched Tesla’s performance in the past. And exceeded it.
Here’s Tesla’s one-year gain—which covers its big spike this year—vs. silver’s gains during its two biggest bull markets (2008-2011, and 1979-1980).
Silver’s run from its 2008 low to 2011 high comes close to Tesla’s performance over the past year. But silver’s parabolic move from January 1970 to its peak in January 1980 exceeded Tesla’s run by 221 percentage points.
Yes, the tiny silver market, largely ignored by Wall Street, provided investors a greater return in 1979-1980 than Tesla has this year.
Will silver see another run that rivals Tesla’s performance? Or even exceed it?
To match Tesla’s 501% run, silver would have to rise to $160 (from Friday’s closing price of $26.71). Given the monetary crisis that’s still ahead, this is not far-fetched.
In fact, Mike Maloney calls $150 silver a no-brainer.
And while I don’t like to count my eggs before they hatch, Mike lays out a case for how silver could even reach as much as $700.
There are certainly no guarantees, and everyone has to make their own investment decisions, but I can tell you that Mike and I are investing heavily in silver because we believe it will be a direct beneficiary of the monetary fallout that at this point is inescapable. And if that fallout includes inflation, look out above.
So my answer is yes, silver will be the next Tesla.
https://goldsilver.com/blog/is-silver-the-next-tesla/
Jeff Clark, Senior Analyst, GoldSilver.com
SEP 14, 2020
It’s no secret that one of the Nasdaq’s best performing stocks this year has been Tesla. Its meteoric rise, until recently, flashed dollar signs in the dreams of its investors.
Given silver’s historical volatility, a question dawned on me: could silver log a similar runaway price advance in the not-too-distant future?
It’s a fair question. Not only can silver be highly volatile, but potentially life-changing catalysts are staring us in the face. So let’s have a little fun and see if silver could have a comparable parabolic run…
The Core Reason for Silver’s Volatility
Long-time silver investors already know this, but the primary reason the silver price is so volatile is because it’s a teeny tiny market. It takes less cash coming in to impact its price than it does other assets, including gold.
And when we look at just the investment market for silver, it’s even smaller.
While the amount of silver that is refined into coins and bars fluctuates every year, only 6.15% of total above-ground holdings are estimated to be in investment form.
And yet investment demand has the biggest impact on its price, because other uses don’t fluctuate all that greatly and investment demand can. If demand for bullion products is low, the price historically has not moved much. If it’s high, the price tends to jump.
Last year 36.2 million ounces of silver went to coins and bars, below its long-term average, and the price rose a modest 15%. Investment demand has changed in a big way this year, and the spike sent silver on a relentless surge, rising 145% from its March low to August high.
And yet, Tesla stock has trounced silver this year. Here’s how it’s performed year-to-date, vs. silver.
Tesla stock rose as much as 468% at its peak last month, vs. silver’s advance of 60%. Both have since pulled back, but despite silver’s strong performance this year, Tesla has gained almost eight times more in price.
That’s reflected in the growth of their market capitalizations, too… using the figure of 3.512 billion ounces of above-ground investment silver (CPM Group’s estimate), you can see how silver’s “market cap” has grown this year as the price has risen (right bars). But Tesla’s market cap has exploded (left bars).
Even with the recent big pullback in its share price, Tesla’s market cap is 360% higher now than when the year began. That’s a huge jump for an individual stock in less than nine months.
And let’s not forget that this is ONE company… all above-ground investment silver (at $26) is currently one-quarter the value of Tesla.
This again highlights just how small this market is, and why it can be so volatile.
With that context, let’s get to the big question…
Is Silver the Next Tesla?
Yes.
How can I state that so confidently? For starters, because it’s already matched Tesla’s performance in the past. And exceeded it.
Here’s Tesla’s one-year gain—which covers its big spike this year—vs. silver’s gains during its two biggest bull markets (2008-2011, and 1979-1980).
Silver’s run from its 2008 low to 2011 high comes close to Tesla’s performance over the past year. But silver’s parabolic move from January 1970 to its peak in January 1980 exceeded Tesla’s run by 221 percentage points.
Yes, the tiny silver market, largely ignored by Wall Street, provided investors a greater return in 1979-1980 than Tesla has this year.
Will silver see another run that rivals Tesla’s performance? Or even exceed it?
To match Tesla’s 501% run, silver would have to rise to $160 (from Friday’s closing price of $26.71). Given the monetary crisis that’s still ahead, this is not far-fetched.
In fact, Mike Maloney calls $150 silver a no-brainer.
And while I don’t like to count my eggs before they hatch, Mike lays out a case for how silver could even reach as much as $700.
There are certainly no guarantees, and everyone has to make their own investment decisions, but I can tell you that Mike and I are investing heavily in silver because we believe it will be a direct beneficiary of the monetary fallout that at this point is inescapable. And if that fallout includes inflation, look out above.
So my answer is yes, silver will be the next Tesla.
https://goldsilver.com/blog/is-silver-the-next-tesla/
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I have to say that with my two cents worth I fully agree with you. My thoughts are that if you want to trade the price movements of the metals paper silver/gold is the way to go because of its liquidity, easy valuation and lack of any logistical problems to the sale. I am also a firm believer in the adage "if you don't hold it you don't own it" which is fine for those of us with the thoughts of TSHTF situations such as a total currency collapse where the physical holdings would provide an insurance type of reserve in those situations. Trading based upon the price movements of the metal is, to me, a completely different ball game in my estimation. Each holding has its place in a well diversified set of asset holdings depending on ones individual goals.
I plan on never selling my physical holdings and it is my biggest hope that I, as well as you, do not live in a time when the physical holdings have to be liquidated to meet the daily needs of staying alive. I do however hold a few shares in mining companies that I have bought and sold in my lifetime. Trading on price movements is for paper the way I see it and hopefully none of us will see the day that we have to sell our physical holdings.
Believe it or not this is something my mother drilled into my head when I was growing up in the 60's and 70's. She obviously did not live in a time of anarchy where she had to liquidate her physical holdings for survival and was therefore able to pass her so called insurance holdings to her ancestors. I too, with any luck, will do the same with my holdings that will provide a similar insurance holding to my ancestors. Incidentally here are a couple of bars of my mother's silver holdings. Barbaric holdings of prior generations some might say but they have endured on and to this very day still provide the same qualities that they originally did when they were first purchased some 50 or so years ago.
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Let's see how much fear there is IF...RGB seat is filled before November 3rd, Trump is reelected, more upheaval in more cities, Hiden is elected and becomes ill BEFORE inauguration!, war between China and India...etc.
Some many scenarios but fear rules the day and that could/will push silver to $40 by years end.
YMMV
Some many scenarios but fear rules the day and that could/will push silver to $40 by years end.
YMMV
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More investment porn....DDOD
Gold vs. Silver – Absolutely No Comparison
October 3, 2020Gold, Silvergold and silver fundamentals, gold prices vs silver prices, gold silver ratio myth, gold vs silver, gold vs silver comparison, gold-silver ratioKelsey Williams
In the five months between March and August this year, the price of silver increased from a fourteen-year low of $11.77 per ounce to a seven-year high of $29.26. That is a whopping gain of one hundred sixty-three percent.
Meanwhile, gold’s price rose from its low of $1472 per ounce to a recent high of $2061. That represents a gain of forty percent, which is certainly a handsome number. Nevertheless, silver’s performance outshone gold by a ratio of four-to-one.
However, five months doesn’t tell the whole story. For those who were and are, hopeful that this is just the beginning of silver’s day in the sun, be warned. Looking at the bigger picture historically, silver can’t hold a candle to gold.
We referred above to silver’s price outperformance relative to gold for the most recent five months. Here is a chart that shows that same performance within the context of the past five years…
(source)
As you can see, when both metals started their five-month run to recent peaks, gold (blue line) was already up eighty percent from its low in 2015. At that time, silver (gold line) was actually lower than it was five years earlier.
For the four years leading up to 2020, gold’s price gains of eighty percent dwarfed silver’s net loss by an infinite number.
Hence, much of silver’s outperformance relative to gold was, in some respects, just a matter of regaining lost ground. The net effect remains that for the five-year period, gold actually outperformed silver. Not by a lot, but it certainly calls into question interpretations and projections for more outperformance by silver going forward.
Gold vs Silver – 10 years; 100 years
One might look at these results and consider that choosing between the two metals is a toss-up. Over a reasonable length of time, maybe it doesn’t make much difference whether you own gold or silver.
So, let’s look at another chart. The one below is also a comparison of gold prices vs. silver prices. This one covers the past ten years…
(source)
Here we see that gold for the ten-year period is up fifty percent. Silver, on the other hand, for the ten-year period, is unchanged.
Comparing current prices for both metals to their peaks in 2011, gold is unchanged and silver is lower by fifty-five percent.
The farther back we go, the worse it looks for silver. The next chart shows gold prices vs. silver prices over the past one hundred years…
(source)
When looking at this chart it is important to focus on the widening gap between gold prices (blue line) and silver prices (gold line); NOT the relative symmetry of their price action. Over time, the gap continues to widen in favor of gold prices.
This widening gap translates to a higher gold-to-silver ratio which can be seen on the chart below…
(source)
“Silver investors who are depending on a declining gold-to-silver ratio are betting that silver will outperform gold going forward. But, if anything, the chart above shows just the opposite. For the past fifty years, the ratio has stayed above a rising trend line taking it to much higher levels.” (see Gold-Silver Ratio: Debunking The Myth)
The price range for gold over the past ten years reflects a decline in the purchasing power of the US dollar of somewhere between ninety-eight ($1000 per ounce) and ninety-nine percent ($2000 per ounce) since the inception of the Federal Reserve in 1913.
If the price of silver were to compare favorably with the changes in the price of gold since 1913, silver’s price today would need to be at least $100 per ounce. It is not close to that; nor has it ever been remotely close to that price.
At its most extreme, the silver price at its high point ten years ago, reached $50 per ounce. Worse, $50 per ounce is the same price point peak it hit thirty years earlier in 1980.
Over thirty years, from its price peak of $50 in 1980 to its price peak of $50 in 2011, silver had zero gains. In inflation-adjusted terms, that is a loss of fifty percent.
At its recent high in August, gold reached $2067 per ounce, a one-hundred fold increase from its fixed and convertible price of $20.67. That reflects a ninety-nine percent decline in the dollar’s purchasing power.
Silver, however, managed to climb only as high $29 per ounce and is currently at $23.50 per ounce. At its current price, silver is more than fifty percent lower than it was ten years ago; whereas gold at $1880 is right about where it peaked in 2011.
The action in prices for both gold and silver recently, and over the past ten years, is a continuation of the long-term trend which is evident in the charts above. The trend is supported by the fundamentals. Those fundamentals are…
(also see Gold And Silver – Fundamentals Be Damned)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!
https://www.kelseywilliamsgold.com/gold-vs-silver-absolutely-no-comparison/
Gold vs. Silver – Absolutely No Comparison
October 3, 2020Gold, Silvergold and silver fundamentals, gold prices vs silver prices, gold silver ratio myth, gold vs silver, gold vs silver comparison, gold-silver ratioKelsey Williams
In the five months between March and August this year, the price of silver increased from a fourteen-year low of $11.77 per ounce to a seven-year high of $29.26. That is a whopping gain of one hundred sixty-three percent.
Meanwhile, gold’s price rose from its low of $1472 per ounce to a recent high of $2061. That represents a gain of forty percent, which is certainly a handsome number. Nevertheless, silver’s performance outshone gold by a ratio of four-to-one.
However, five months doesn’t tell the whole story. For those who were and are, hopeful that this is just the beginning of silver’s day in the sun, be warned. Looking at the bigger picture historically, silver can’t hold a candle to gold.
We referred above to silver’s price outperformance relative to gold for the most recent five months. Here is a chart that shows that same performance within the context of the past five years…
(source)
As you can see, when both metals started their five-month run to recent peaks, gold (blue line) was already up eighty percent from its low in 2015. At that time, silver (gold line) was actually lower than it was five years earlier.
For the four years leading up to 2020, gold’s price gains of eighty percent dwarfed silver’s net loss by an infinite number.
Hence, much of silver’s outperformance relative to gold was, in some respects, just a matter of regaining lost ground. The net effect remains that for the five-year period, gold actually outperformed silver. Not by a lot, but it certainly calls into question interpretations and projections for more outperformance by silver going forward.
Gold vs Silver – 10 years; 100 years
One might look at these results and consider that choosing between the two metals is a toss-up. Over a reasonable length of time, maybe it doesn’t make much difference whether you own gold or silver.
So, let’s look at another chart. The one below is also a comparison of gold prices vs. silver prices. This one covers the past ten years…
Here we see that gold for the ten-year period is up fifty percent. Silver, on the other hand, for the ten-year period, is unchanged.
Comparing current prices for both metals to their peaks in 2011, gold is unchanged and silver is lower by fifty-five percent.
The farther back we go, the worse it looks for silver. The next chart shows gold prices vs. silver prices over the past one hundred years…
When looking at this chart it is important to focus on the widening gap between gold prices (blue line) and silver prices (gold line); NOT the relative symmetry of their price action. Over time, the gap continues to widen in favor of gold prices.
This widening gap translates to a higher gold-to-silver ratio which can be seen on the chart below…
“Silver investors who are depending on a declining gold-to-silver ratio are betting that silver will outperform gold going forward. But, if anything, the chart above shows just the opposite. For the past fifty years, the ratio has stayed above a rising trend line taking it to much higher levels.” (see Gold-Silver Ratio: Debunking The Myth)
The price range for gold over the past ten years reflects a decline in the purchasing power of the US dollar of somewhere between ninety-eight ($1000 per ounce) and ninety-nine percent ($2000 per ounce) since the inception of the Federal Reserve in 1913.
If the price of silver were to compare favorably with the changes in the price of gold since 1913, silver’s price today would need to be at least $100 per ounce. It is not close to that; nor has it ever been remotely close to that price.
At its most extreme, the silver price at its high point ten years ago, reached $50 per ounce. Worse, $50 per ounce is the same price point peak it hit thirty years earlier in 1980.
Over thirty years, from its price peak of $50 in 1980 to its price peak of $50 in 2011, silver had zero gains. In inflation-adjusted terms, that is a loss of fifty percent.
At its recent high in August, gold reached $2067 per ounce, a one-hundred fold increase from its fixed and convertible price of $20.67. That reflects a ninety-nine percent decline in the dollar’s purchasing power.
Silver, however, managed to climb only as high $29 per ounce and is currently at $23.50 per ounce. At its current price, silver is more than fifty percent lower than it was ten years ago; whereas gold at $1880 is right about where it peaked in 2011.
The action in prices for both gold and silver recently, and over the past ten years, is a continuation of the long-term trend which is evident in the charts above. The trend is supported by the fundamentals. Those fundamentals are…
- Gold is real money and its price reflects changes in the purchasing power of the US dollar. It is a store of value for wealth-conscious investors.
- Silver is an industrial commodity with a secondary use as money. It is not a store of value.
(also see Gold And Silver – Fundamentals Be Damned)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!
https://www.kelseywilliamsgold.com/gold-vs-silver-absolutely-no-comparison/
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Maybe that is the "V" shaped recovery.....
I didn't get any $5 silver or $250 gold. But most came around 2008-2012 and this article sums up my experience to a T. I'm one looking to trade up if / when the ratio closes up.
More investment porn....DDOD
Gold vs. Silver – Absolutely No Comparison
October 3, 2020Gold, Silvergold and silver fundamentals, gold prices vs silver prices, gold silver ratio myth, gold vs silver, gold vs silver comparison, gold-silver ratioKelsey Williams
In the five months between March and August this year, the price of silver increased from a fourteen-year low of $11.77 per ounce to a seven-year high of $29.26. That is a whopping gain of one hundred sixty-three percent.
Meanwhile, gold’s price rose from its low of $1472 per ounce to a recent high of $2061. That represents a gain of forty percent, which is certainly a handsome number. Nevertheless, silver’s performance outshone gold by a ratio of four-to-one.
However, five months doesn’t tell the whole story. For those who were and are, hopeful that this is just the beginning of silver’s day in the sun, be warned. Looking at the bigger picture historically, silver can’t hold a candle to gold.
We referred above to silver’s price outperformance relative to gold for the most recent five months. Here is a chart that shows that same performance within the context of the past five years…
(source)
As you can see, when both metals started their five-month run to recent peaks, gold (blue line) was already up eighty percent from its low in 2015. At that time, silver (gold line) was actually lower than it was five years earlier.
For the four years leading up to 2020, gold’s price gains of eighty percent dwarfed silver’s net loss by an infinite number.
Hence, much of silver’s outperformance relative to gold was, in some respects, just a matter of regaining lost ground. The net effect remains that for the five-year period, gold actually outperformed silver. Not by a lot, but it certainly calls into question interpretations and projections for more outperformance by silver going forward.
Gold vs Silver – 10 years; 100 years
One might look at these results and consider that choosing between the two metals is a toss-up. Over a reasonable length of time, maybe it doesn’t make much difference whether you own gold or silver.
So, let’s look at another chart. The one below is also a comparison of gold prices vs. silver prices. This one covers the past ten years…
(source)
Here we see that gold for the ten-year period is up fifty percent. Silver, on the other hand, for the ten-year period, is unchanged.
Comparing current prices for both metals to their peaks in 2011, gold is unchanged and silver is lower by fifty-five percent.
The farther back we go, the worse it looks for silver. The next chart shows gold prices vs. silver prices over the past one hundred years…
(source)
When looking at this chart it is important to focus on the widening gap between gold prices (blue line) and silver prices (gold line); NOT the relative symmetry of their price action. Over time, the gap continues to widen in favor of gold prices.
This widening gap translates to a higher gold-to-silver ratio which can be seen on the chart below…
(source)
“Silver investors who are depending on a declining gold-to-silver ratio are betting that silver will outperform gold going forward. But, if anything, the chart above shows just the opposite. For the past fifty years, the ratio has stayed above a rising trend line taking it to much higher levels.” (see Gold-Silver Ratio: Debunking The Myth)
The price range for gold over the past ten years reflects a decline in the purchasing power of the US dollar of somewhere between ninety-eight ($1000 per ounce) and ninety-nine percent ($2000 per ounce) since the inception of the Federal Reserve in 1913.
If the price of silver were to compare favorably with the changes in the price of gold since 1913, silver’s price today would need to be at least $100 per ounce. It is not close to that; nor has it ever been remotely close to that price.
At its most extreme, the silver price at its high point ten years ago, reached $50 per ounce. Worse, $50 per ounce is the same price point peak it hit thirty years earlier in 1980.
Over thirty years, from its price peak of $50 in 1980 to its price peak of $50 in 2011, silver had zero gains. In inflation-adjusted terms, that is a loss of fifty percent.
At its recent high in August, gold reached $2067 per ounce, a one-hundred fold increase from its fixed and convertible price of $20.67. That reflects a ninety-nine percent decline in the dollar’s purchasing power.
Silver, however, managed to climb only as high $29 per ounce and is currently at $23.50 per ounce. At its current price, silver is more than fifty percent lower than it was ten years ago; whereas gold at $1880 is right about where it peaked in 2011.
The action in prices for both gold and silver recently, and over the past ten years, is a continuation of the long-term trend which is evident in the charts above. The trend is supported by the fundamentals. Those fundamentals are…
(also see Gold And Silver – Fundamentals Be Damned)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!
https://www.kelseywilliamsgold.com/gold-vs-silver-absolutely-no-comparison/
Gold vs. Silver – Absolutely No Comparison
October 3, 2020Gold, Silvergold and silver fundamentals, gold prices vs silver prices, gold silver ratio myth, gold vs silver, gold vs silver comparison, gold-silver ratioKelsey Williams
In the five months between March and August this year, the price of silver increased from a fourteen-year low of $11.77 per ounce to a seven-year high of $29.26. That is a whopping gain of one hundred sixty-three percent.
Meanwhile, gold’s price rose from its low of $1472 per ounce to a recent high of $2061. That represents a gain of forty percent, which is certainly a handsome number. Nevertheless, silver’s performance outshone gold by a ratio of four-to-one.
However, five months doesn’t tell the whole story. For those who were and are, hopeful that this is just the beginning of silver’s day in the sun, be warned. Looking at the bigger picture historically, silver can’t hold a candle to gold.
We referred above to silver’s price outperformance relative to gold for the most recent five months. Here is a chart that shows that same performance within the context of the past five years…
(source)
As you can see, when both metals started their five-month run to recent peaks, gold (blue line) was already up eighty percent from its low in 2015. At that time, silver (gold line) was actually lower than it was five years earlier.
For the four years leading up to 2020, gold’s price gains of eighty percent dwarfed silver’s net loss by an infinite number.
Hence, much of silver’s outperformance relative to gold was, in some respects, just a matter of regaining lost ground. The net effect remains that for the five-year period, gold actually outperformed silver. Not by a lot, but it certainly calls into question interpretations and projections for more outperformance by silver going forward.
Gold vs Silver – 10 years; 100 years
One might look at these results and consider that choosing between the two metals is a toss-up. Over a reasonable length of time, maybe it doesn’t make much difference whether you own gold or silver.
So, let’s look at another chart. The one below is also a comparison of gold prices vs. silver prices. This one covers the past ten years…
Here we see that gold for the ten-year period is up fifty percent. Silver, on the other hand, for the ten-year period, is unchanged.
Comparing current prices for both metals to their peaks in 2011, gold is unchanged and silver is lower by fifty-five percent.
The farther back we go, the worse it looks for silver. The next chart shows gold prices vs. silver prices over the past one hundred years…
When looking at this chart it is important to focus on the widening gap between gold prices (blue line) and silver prices (gold line); NOT the relative symmetry of their price action. Over time, the gap continues to widen in favor of gold prices.
This widening gap translates to a higher gold-to-silver ratio which can be seen on the chart below…
“Silver investors who are depending on a declining gold-to-silver ratio are betting that silver will outperform gold going forward. But, if anything, the chart above shows just the opposite. For the past fifty years, the ratio has stayed above a rising trend line taking it to much higher levels.” (see Gold-Silver Ratio: Debunking The Myth)
The price range for gold over the past ten years reflects a decline in the purchasing power of the US dollar of somewhere between ninety-eight ($1000 per ounce) and ninety-nine percent ($2000 per ounce) since the inception of the Federal Reserve in 1913.
If the price of silver were to compare favorably with the changes in the price of gold since 1913, silver’s price today would need to be at least $100 per ounce. It is not close to that; nor has it ever been remotely close to that price.
At its most extreme, the silver price at its high point ten years ago, reached $50 per ounce. Worse, $50 per ounce is the same price point peak it hit thirty years earlier in 1980.
Over thirty years, from its price peak of $50 in 1980 to its price peak of $50 in 2011, silver had zero gains. In inflation-adjusted terms, that is a loss of fifty percent.
At its recent high in August, gold reached $2067 per ounce, a one-hundred fold increase from its fixed and convertible price of $20.67. That reflects a ninety-nine percent decline in the dollar’s purchasing power.
Silver, however, managed to climb only as high $29 per ounce and is currently at $23.50 per ounce. At its current price, silver is more than fifty percent lower than it was ten years ago; whereas gold at $1880 is right about where it peaked in 2011.
The action in prices for both gold and silver recently, and over the past ten years, is a continuation of the long-term trend which is evident in the charts above. The trend is supported by the fundamentals. Those fundamentals are…
- Gold is real money and its price reflects changes in the purchasing power of the US dollar. It is a store of value for wealth-conscious investors.
- Silver is an industrial commodity with a secondary use as money. It is not a store of value.
(also see Gold And Silver – Fundamentals Be Damned)
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!
https://www.kelseywilliamsgold.com/gold-vs-silver-absolutely-no-comparison/
I didn't get any $5 silver or $250 gold. But most came around 2008-2012 and this article sums up my experience to a T. I'm one looking to trade up if / when the ratio closes up.
As a person who possesses a crystal ball I'd like to say that I've no clue how silver and gold will price tomorrow much less a year from now.
Looking back over fifteen years I would say that there is a general tendency for PMs to drift higher in price but it's very erratic.
The only thing more erratic is oil; which has gone from $150 a barrel to "we will pay you to take it."
Looking back over fifteen years I would say that there is a general tendency for PMs to drift higher in price but it's very erratic.
The only thing more erratic is oil; which has gone from $150 a barrel to "we will pay you to take it."
I wholeheartedly agree,
However, whenever I a hear a rebuttal, like ....that would suck for us, or careful for what you wish for,
I would suggest to the one cautioning, that this is not what a gold bug or hard money advocate wishes for!
Gold bugs or hard money advocates warn that using FIAT money will lead to this scenario, it has happened many times over.
(Voltaire - all fiat money returns to intrinsic value - 0)
Holding gold is not a speculation, its not a trade,
The ones that made the decision to break the gold standard should have been careful for what they wished for, however I suspect the ones in the know of that event are perfectly hedged! When the SHTF be prepared to roll up your sleeve (more ways than one)
Protect yourself!
However, whenever I a hear a rebuttal, like ....that would suck for us, or careful for what you wish for,
I would suggest to the one cautioning, that this is not what a gold bug or hard money advocate wishes for!
Gold bugs or hard money advocates warn that using FIAT money will lead to this scenario, it has happened many times over.
(Voltaire - all fiat money returns to intrinsic value - 0)
Holding gold is not a speculation, its not a trade,
The ones that made the decision to break the gold standard should have been careful for what they wished for, however I suspect the ones in the know of that event are perfectly hedged! When the SHTF be prepared to roll up your sleeve (more ways than one)
Protect yourself!
Last edited:
I wholeheartedly agree,
However, whenever I a hear a rebuttal, like ....that would suck for us, or careful for what you wish for,
I would suggest to the one cautioning, that this is not what a gold bug or hard money advocate wishes for!
Gold bugs or hard money advocates warn that using FIAT money will lead to this scenario, it has happened many times over.
(Voltaire - all fiat money returns to intrinsic value - 0)
Holding gold is not a speculation, its not a trade,
The ones that made the decision to break the gold standard should have been careful for what they wished for, however I suspect the ones in the know of that event are perfectly hedged! When the SHTF be prepared to roll up your sleeve (more ways than one)
Protect yourself!
However, whenever I a hear a rebuttal, like ....that would suck for us, or careful for what you wish for,
I would suggest to the one cautioning, that this is not what a gold bug or hard money advocate wishes for!
Gold bugs or hard money advocates warn that using FIAT money will lead to this scenario, it has happened many times over.
(Voltaire - all fiat money returns to intrinsic value - 0)
Holding gold is not a speculation, its not a trade,
The ones that made the decision to break the gold standard should have been careful for what they wished for, however I suspect the ones in the know of that event are perfectly hedged! When the SHTF be prepared to roll up your sleeve (more ways than one)
Protect yourself!
Actually, I think I've got around 12% of my wealth in PMs. No regrets. I occasionally reallocate and it's then that a bit more gold is accumulated.
But just a bit.
I've been accumulating for over fifteen years and I've seen silver prices go parabolic more then once.
Both up and down...and around and around. Fun to trade, but hardly a store of value given it's unstable pricing.
two scenario
ONE
CORRECTION is over at 21.64, if its three wave correction. And we are in first minute upward wave.
SECOND
CORRECTION is not over and we may see an extension of 3rd down wave to 22.22 / 19.92
29.84 – 23.38= 6.46 = 22%
23.38 – 28.90 = 5.52 = 23%
28.90 – 21.64 = 7.26 = 25%
21.64 - 25.54 = 3.9= 18
25.54 – 22.22 / 19.92
ONE
CORRECTION is over at 21.64, if its three wave correction. And we are in first minute upward wave.
SECOND
CORRECTION is not over and we may see an extension of 3rd down wave to 22.22 / 19.92
29.84 – 23.38= 6.46 = 22%
23.38 – 28.90 = 5.52 = 23%
28.90 – 21.64 = 7.26 = 25%
21.64 - 25.54 = 3.9= 18
25.54 – 22.22 / 19.92
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Silver: Like Gold on Steroids
Contributed Opinion
Source: Peter Krauth for Streetwise Reports (10/12/20)
Peter Krauth explains why he believes investors should hold a position in silver.
We're still in the early innings of a precious metals bull market.
And if you're wondering whether you need to own some silver, my answer is categorically yes.
It's only a matter of degree.
With silver that's important because it acts like gold, but on steroids.
Silver can languish for extended periods, even if gold moves. But then it tends to play a rapid game of catch-up.
Timing such moves is difficult at best. Instead, it's better to build a silver position on price weakness, then simply sit patiently.
Because as I'll show you, the payoff tends to be very rewarding.
Silver Dramatically Outpaces Other Assets
Silver has been on a tear so far this year, up 38.3% versus gold's 25.7%.
Much of that gain came in Q3, when silver clocked a 33% gain against gold's more modest 6.7%.
By all accounts, silver's being driven by its monetary metal characteristics. The jury is out on whether gold or silver was first to be used as a currency, but we do know that they were used going back at least 5,000 years.
Fans of both metals should be happy, since the oldest known coin is the Lydian trite from around 600 BC. It was made of electrum, which is a gold and silver alloy. Still, silver was the most commonly used metal in daily transactions until the 20th century.
More recently, demand for silver has exploded. The Silver Institute breaks down demand into five main categories: industrial, photography, jewelry, silverware and physical investment. 2019 saw smallish decreases in four of these categories over 2018. However, within the industrial sector, photovoltaics (solar panels) enjoyed a 6.7% increase.
The standout, however, is net physical demand, where 2019 saw an impressive 12.3% increase over 2018. In my view, given the large price gain this year, that trend will persist.
As well, Goldman Sachs equity analysts believe global solar installations will jump 50% between 2019 and 2023 as green energy silver demand surges higher.
Silver Investors Are Loyal
One telling indicator of the "stickiness" of silver ETF buying is the action of Robinhood account holders.
There were four bouts of weakness since the February/March selloff in silver stocks as represented by the SIL ETF. The number of holders of SIL dropped in a small but notable way in March, but then barely weakened after that, even when the price of SIL retreated.
Most impressive is the early August action, when SIL dropped from $52 to $44, yet the number of users holding SIL actually continued to rise.
If we look at the recent price action of silver, we see some renewed strength.
Both the RSI and MACD momentum indicators have been trending upwards. But "smart money" silver hedgers are still short just over 56,000 contracts, not suggesting bullish sentiment right now.
If silver manages to rise from here, I'd watch for it to possibly "test" resistance near its 50-day moving average around $26. If it reverses from there then we're likely looking at more weakness/consolidation before rallying.
The silver stocks to silver ratio has been rising slightly since early August.
But momentum has been flattening, and the 200-day moving average has been acting as overhead resistance. Also, in late September we saw the 50-day moving average cross downwards over the 200-day moving average, which also suggests possible ongoing weakness in the near term.
In my view, silver could require more selling to rebalance sentiment. If that happens, then of course I'd expect silver stocks to magnify such a drop.
Still, I expect any near-term weakness to remain short-lived. All the fundamental and technical drivers are in place to push gold and silver much higher in the months and years ahead.
As the next chart of SLV versus GLD shows, silver is up 108% against gold's 29% since their March bottom. That's nearly four times the return.
I think we could see silver take out its August $30 high, and possibly test the $37 level before year's end.
So, if you're concerned about silver's volatility, then just allocate a smaller slice of your portfolio while maintaining some exposure.
Remember, when silver gets going, it's like gold on steroids.
--Peter Krauth
https://www.streetwisereports.com/article/2020/10/12/silver-like-gold-on-steroids.html
Contributed Opinion
Source: Peter Krauth for Streetwise Reports (10/12/20)
We're still in the early innings of a precious metals bull market.
And if you're wondering whether you need to own some silver, my answer is categorically yes.
It's only a matter of degree.
With silver that's important because it acts like gold, but on steroids.
Silver can languish for extended periods, even if gold moves. But then it tends to play a rapid game of catch-up.
Timing such moves is difficult at best. Instead, it's better to build a silver position on price weakness, then simply sit patiently.
Because as I'll show you, the payoff tends to be very rewarding.
Silver Dramatically Outpaces Other Assets
Silver has been on a tear so far this year, up 38.3% versus gold's 25.7%.
Much of that gain came in Q3, when silver clocked a 33% gain against gold's more modest 6.7%.
By all accounts, silver's being driven by its monetary metal characteristics. The jury is out on whether gold or silver was first to be used as a currency, but we do know that they were used going back at least 5,000 years.
Fans of both metals should be happy, since the oldest known coin is the Lydian trite from around 600 BC. It was made of electrum, which is a gold and silver alloy. Still, silver was the most commonly used metal in daily transactions until the 20th century.
More recently, demand for silver has exploded. The Silver Institute breaks down demand into five main categories: industrial, photography, jewelry, silverware and physical investment. 2019 saw smallish decreases in four of these categories over 2018. However, within the industrial sector, photovoltaics (solar panels) enjoyed a 6.7% increase.
The standout, however, is net physical demand, where 2019 saw an impressive 12.3% increase over 2018. In my view, given the large price gain this year, that trend will persist.
As well, Goldman Sachs equity analysts believe global solar installations will jump 50% between 2019 and 2023 as green energy silver demand surges higher.
Silver Investors Are Loyal
One telling indicator of the "stickiness" of silver ETF buying is the action of Robinhood account holders.
There were four bouts of weakness since the February/March selloff in silver stocks as represented by the SIL ETF. The number of holders of SIL dropped in a small but notable way in March, but then barely weakened after that, even when the price of SIL retreated.
Most impressive is the early August action, when SIL dropped from $52 to $44, yet the number of users holding SIL actually continued to rise.
If we look at the recent price action of silver, we see some renewed strength.
Both the RSI and MACD momentum indicators have been trending upwards. But "smart money" silver hedgers are still short just over 56,000 contracts, not suggesting bullish sentiment right now.
If silver manages to rise from here, I'd watch for it to possibly "test" resistance near its 50-day moving average around $26. If it reverses from there then we're likely looking at more weakness/consolidation before rallying.
The silver stocks to silver ratio has been rising slightly since early August.
But momentum has been flattening, and the 200-day moving average has been acting as overhead resistance. Also, in late September we saw the 50-day moving average cross downwards over the 200-day moving average, which also suggests possible ongoing weakness in the near term.
In my view, silver could require more selling to rebalance sentiment. If that happens, then of course I'd expect silver stocks to magnify such a drop.
Still, I expect any near-term weakness to remain short-lived. All the fundamental and technical drivers are in place to push gold and silver much higher in the months and years ahead.
As the next chart of SLV versus GLD shows, silver is up 108% against gold's 29% since their March bottom. That's nearly four times the return.
I think we could see silver take out its August $30 high, and possibly test the $37 level before year's end.
So, if you're concerned about silver's volatility, then just allocate a smaller slice of your portfolio while maintaining some exposure.
Remember, when silver gets going, it's like gold on steroids.
--Peter Krauth
https://www.streetwisereports.com/article/2020/10/12/silver-like-gold-on-steroids.html
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- Joined
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seriously, how can anyone really 'know' one way or another?
i've been fascinated with the reasons the pundits give for this happening that way or something else happening another way
imho, there are tells that can be used, but in such a manipulated market, is there anything such as a true 'tell' left anymore?
i'll put a quarter on it, tomorrow, the pundits will have several different reasons for any pop tonight but, by mid-day, the stories will congeal into a single reason...
seen it before, it's amazing how they do that, very cunning and controlled too
2¢
i've been fascinated with the reasons the pundits give for this happening that way or something else happening another way
imho, there are tells that can be used, but in such a manipulated market, is there anything such as a true 'tell' left anymore?
i'll put a quarter on it, tomorrow, the pundits will have several different reasons for any pop tonight but, by mid-day, the stories will congeal into a single reason...
seen it before, it's amazing how they do that, very cunning and controlled too
2¢