Peter Schiff: This Is an Incredibly Good Opportunity to Buy Silver
The silver-gold ratio has been way out of whack for months. In recent weeks, it has been above 90-1 and approached 93-1. The modern average over the last century is around 40:1. This tells us that silver is significantly undervalued compared to gold.
Peter Schiff has described this as silver on sale.
Silver has never been this cheap in terms of gold … Meaning that it’s a great time to be buying silver.”
Peter talked about the silver market in his most recent podcast. Could the white metal be joining gold’s party?
Gold was down about $8 on Tuesday as the dollar got a boost thanks to the stronger than expected retail sales numbers. But silver was up about 19 cents. This isn’t a huge rise, but it drove a bigger increase in silver stocks. Some were up by as much as 10%.
So, not only did silver have a relatively large move – although not large enough to normally cause a silver stock to rise by 10% – but what was significant about it is it rose as the price of gold was falling.”
Peter said he saw some technical signs last week that silver was about to break out and he added to his own silver stocks. Silver’s rise yesterday, even as gold fell, could be a sign that silver is going to start closing this abnormal silver-gold ratio.
As of Wednesday morning (July 17), the ratio was at 89.4-1.
This is still an incredibly good opportunity to buy physical silver, to buy silver-oriented stocks.”
Peter said this also indicates to him that the bull market in gold is about to kick into a higher gear.
One of the aspects of the bull market that hadn’t kicked in was silver. You see, normally in a bull market in gold, silver outperforms. I mean, it happens in every bull market, but it hasn’t happened yet. And what I’ve been saying is the reason for this is I think a lot of investors were still very skeptical that we were in a bull market. They were concerned that the breakout was going to be false. They didn’t believe it, so they were not really buying silver.”
Peter said the thinks some investors were hedging their long golds by being short silver. He said he thinks there’s been a lot of spread trading and perhaps the rise in silver Tuesday was driven by investors covering that trade.
I think this is a bullish development for both gold and silver. And it shows that more people are beginning to embrace this bull market and want to get on board in the bull market and want to have more exposure to silver. Because if we’re going to go to a new high in gold, if gold is going to take out $1,900, which I believe it is, silver should outperform.”
If you look at how cheap silver is compared to gold, the upside has probably never been this great.
In this podcast, Peter also talks about the proposed Facebook cryptocurrency Libra and why American politicians seem to be freaking out about it.