Contact us
CALL US NOW 1-888-GOLD-160

Silver Could Be Poised to Come Out of the Shadows

  by    0   1

While there’s been a lot of attention focused on gold over the last few months, silver has remained in the shadows. The white metal has lagged a bit behind as the gold market turned bullish over the last few months. But there are some good reasons to take a close look at silver.

silver bars

According to Bloomberg, silver has advanced 10% since the first of the year while gold surged 18%. But dynamics look good for silver to close that gap:

Silver hasn’t been so cheap relative to gold for more than seven years and with mine supplies forecast to contract this year that may be a sign it’s ready to come out of the yellow metal’s shadow.”

Analysts Bloomberg talked to say silver mine production will likely drop this year for the first time in more than a decade, and demand is set to outpace supply for the fourth straight year.

Industrial use is an important factor in the silver market, but investor demand for the metal is robust as well. As we reported last week, demand for American Silver Eagles remains strong after setting a sales record in 2015. The US Mint continues to keep Silver Eagles on weekly allocation because supply can’t keep pace with demand. Meanwhile, February silver sales at Perth Mint jumped 167.54% from the same period a year ago. It was the sixth straight month of silver sales over 1 million ounces for the Australian mint.

The price spread between gold and silver also looks favorable for the white metal:

An ounce of gold bought about 83 ounces of silver last month, more than any time since the financial crisis of 2008. That’s a signal to some that it’s relatively undervalued and will narrow the gap.”

As of today, that silver:gold ratio sits at 81:18. As SchiffGold Precious Metals Specialist Addison Quale pointed out in an article earlier this year, the average silver:gold ratio has been roughly 54:1 over the last 40 years. This means that when the price of an ounce of gold is about 54 times that of an ounce of silver, the metals are essentially fairly valued. Conservatively, extending upwards and downwards about 20 notches indicates gold is overvalued in relation to silver at a ratio 75:1 and silver is overvalued compared to gold at a ratio of 35:1.

The ratio today indicates gold is currently extremely overvalued compared to silver. That means silver likely has a strong upside.

But ultimately, investors should focus on the long-term value of silver. Like gold, it is “real money,” not fiat currency. While its price may fluctuate in the short-term, it has historically held its value over time. Silver also provides a means to barter. This could prove extremely important in the next economic crisis, as the Greeks found out last summer.

The bottom line is that while gold is shining bright right now, there are also good reasons to take a look at silver.


Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Too Hot to Handle: Gold Due for a Correction?

With gold hitting yet another awe-inspiring all-time high in the wake of Powell’s remarks reassuring markets (more or less) to expect rate cuts in 2024, a few analysts are pointing out risk factors for a correction — so is there really still room to run?


Gold Hits New All-Time Record High

Gold hit a new all-time nominal high, surpassing the previous record set in December of the previous year. The precious metal’s price reached approximately $2,140, indicating a robust and continuing interest in gold as a safe-haven asset, despite a rather peculiar lack of fanfare from the media and retail investors. This latest peak in gold […]


Is a Weak Yen Feeding the Global Gold Bull?

The gold price has been surging, with unprecedented central bank demand gobbling up supply. It has been a force to behold — especially as US monetary policy has been relatively tight since 2022, and 10-year Treasury yields have rocketed up, which generally puts firm downward pressure on gold against USD. 


World Gold Council: “Blistering Central Bank Buying” Fuels Strong Gold Demand

Total gold demand hit an all-time high in 2023, according to a recent report released by the World Gold Council. Last week, the World Gold Council (WGC) released its Gold Demand Trends report, which tracks developments in the demand for and use of gold around the world. Excluding over-the-counter (OTC) trade, 2023 gold demand fell slightly from 2022 […]


VIX – The Calm Before the Storm

The VIX, often referred to as ‘Wall Street’s fear gauge,‘ is currently portraying a sense of calm among investors, registering well below the 20 level. 


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Call Now