For anyone who sees a case for investing in the precious metals, and certainly there are many to be made, you almost have to like silver relative to gold.
Historically, while silver often lags in the beginning of the precious metals rally, it usually goes up by a lot more before all is said and done. And especially now, with the gold to silver ratio at 85:1, while silver comes out of the ground relative to gold at a 10 to 1 ratio, it sure seems like there’s a fair amount of catching up to do.
Then add in that with approximately 2 to 3 billion ounces of above ground silver in investment-grade form, verses approximately 6 billion ounces of above-ground gold available for investment, just based strictly on availability, there’s a lot of room for correction.
The silver supply has already been falling, and even if there’s a recession which leads to falling demand, that would further reduce the silver supply as well. Because the majority of silver comes as a byproduct of other base metal mining, which means that should the economy weaken, the supply of silver is going to go down.
So in a precious metals rally it’s interesting to think about how some of the silver mining stocks might react when the price does finally start to move. Remember that silver is still below its 1980 high, the only metal for which this is the case. And with central banks continuing to respond with more inflationary policies, it will be interesting to see just how high the silver price eventually climbs.
All of which Louis James of the Independence Speculator was kind enough to join me on the show and discuss. So if you see a lot of money printing on the way, and the precious metals rising in response, click to discover the best ways to be prepared for the rally!
October 10, 2019