Let’s get real about silver. Depending on your source and their point of view, silver could be skyrocketing or dropping further, either way, and in very short order. The big and most credible reason for a continuing drop is that silver has become greatly popular in many old and emerging markets, ranging from electronics to medical instruments and the coronavirus pandemic is causing a serious disruption on a global basis, which inevitably will add to an already trending and now growing recession. Silver, which was already at lower support levels fell even further and unlike gold, will suffer earlier and greater from recession.
That being said, there are a number of outrageous factors regarding silver’s current situation that position it well to skyrocket and therefore need to be considered as well. First of all, silver generally moves with gold. Due to rising inflation and failing traditional investment options, a great number of analysts are calling for $3,000 gold by the end of the year and $5,000 by the end of next year. For those same reasons, silver has every reason to shadow gold’s movement. Secondly, a majority of silver’s industrial uses are a one-way trip, meaning that it is consumed or economically irretrievable, once utilized. Historically, the silver to gold ratio has been fifteen to one. The increasing demand for gold in the light of economic issues has exacerbated the ratio to an exponential level of 1:115. The disparity has been growing for years, but why? Last year, we mined six hundred million ounces of silver, while industry consumed almost eight hundred and seventy million ounces. Thirdly, our government’s printing press is going back to work and our national debt is reaching epic proportions, which ensures greater inflation and even less support for an already dwindling stock market. Finally, the introduction of several ETF’s over the past three to five years has also removed a great deal of silver from market availability.
Investors are buying up silver in all its variations at a feverish pace, but it’s not showing up in the price, as a great number of investors are selling silver to cover stock market losses. When reality catches up with this overstretched rubber band, the resulting price spike could be monumental. As economic recovery begins to kick in, once again silver will be first to respond. The silver market is on tenth the size of the gold market, so it’s prone to crisis-driven responses. The current oil price drop, coronavirus-induced recession, and need for market loss coverage have shielded silver’s value from investor sight, but those who are well-positioned early stand to make potentially obscene profits when some or all of these maladies begin to reverse. An explosive price increase, as was seen in 1980 is not at all unlikely and conditions are conducive to even greater potential, possibly exponential.
Regardless, the time to act is now and the potential may never be greater. But no matter what, don’t get caught without a chair when the music stops. Protect your portfolio, assets, and legacy. Call the experts at American Bullion, at (800) 531-6525. Call now, before the greatest potential metals move in history gets underway.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.