![]() This past week was just a small taste of the opening act.Under 30% of silver comes from primary silver mines. The way I see it, all it does is give us more time and another opportunity to keep accumulating silver and silver miners at discount prices. ![]() In the end, this pullback is just par for the course, especially in silver. I recently added three companies to the portfolio, which I believe have exceptional potential to double or better in the next 12 months. In the Silver Stock Investor newsletter, I provide my outlook on which silver stocks offer the best prospects as this bull market progresses. Silver remains cheap on a fundamental basis, a relative basis, and an historical basis. I believe it’s heading towards 55 or even 50. The gold silver ratio has reversed in a dramatic way from its all-time high last March at 125, and has just broken below support at 70. That translates into global silver ETF holdings now in the 1 billion ounce range.Ĭonsider that these total holdings are the equivalent of a whole year’s silver supply: mine production and recycling.Īnd yet silver remains stunningly cheap, especially relative to gold. But 2020 was an absolute standout, with a 16% increase over 2019. 2019 saw an impressive increase of 12% over 2018. Even without the dramatic, explosive action in silver markets over the last week, investment demand has been gradually increasing over the last 5 years. However, I believe the wild card will be investment demand for silver. And although efficiencies have been leading to lower silver consumption per solar panel, in my view expanding volumes will more than make up for that. Meanwhile, the solar sector is also likely to boost silver demand. The Silver Institute projects a 50% rise in automotive silver demand, from 60M oz. Globally, EV sales are projected rise dramatically. Whereas internal combustion engines need 15-28 grams of silver, EVs need double that amount at 25-50 grams per vehicle. Output has dropped along with reserves.Īnd with 70% of mined silver is a by-product of mining other metals, those miners are not motivated to produce more even when silver rises: it’s too small a portion of their revenues.Īll this is happening while multiple demand forces are building. Several consecutive years of low prices have led to underinvestment and underexploration. Not one of the top 10 silver producing countries has escaped this trend. Supply has been falling consistently for the last 5 years. Huge forces are going to keep pushing silver higher for years to come. More importantly, I believe silver still remains fundamentally cheap. But what this whole saga has done is to introduce a massive new following to the silver space. Some of this move will turn out to be a short-term speculative buying frenzy. 29), the iShares Silver Trust (NYSE:SLV), the world’s largest silver-backed exchange traded fund, added nearly $1 billion of inflows. The ETFMG Prime Junior Silver Miners ETF (NYSE:SILJ) went from $13.60 to $17.80 in that same time. The Global X Silver Miners ETF NYSE:SIL) went from $40 to $49 in just three days. Silver stocks were ripping higher, and many were seeing their trading volumes explode anywhere from 6-10 times normal levels. Silver had gained almost 20% in just three trading days. By Monday, February 1st, silver was up nearly 8% from the Friday close. By Sunday, January 31st, most bullion dealers were outright sold out. Retail investors piled in en masse and kept doing so on Friday, Jan. Dramatically higher silver prices are still squarely ahead.Ī Reddit subgroup called WallStreetBets sent out a call-to-action to buy silver on January 28th. It was enough to cause the Comex to raise silver margins by 18% after just two up days.īut silver’s story is still in its early days. It’s all related to the now infamous WallStreetBets calls to action, the latest of which targeted silver. But it’s still up 20% since late November, and has gained 125% since its March lows.Īnd silver stocks have been surging. Silver’s given back $2 since its $29 peak on Feb. In the recent #silversqueeze hype, silver traded at an 8-year high, as demand was exploding. In some cases silver premiums reached historic highs, near 100% of spot prices. Gold and silver bullion dealers were nearly completely sold out within days. Dealers are asking for 35% premiums…and that’s if you can get your hands on any silver at all.Īnd yet I remember well, less than a year ago in mid-March, when the world started a major lockdown in response to the Covid-19 pandemic. Odds are bullion dealers going to have a tough time keeping any silver in stock.Įveryone is buying, and no one is selling the physical metal. That’s the message most hopeful physical silver buyers have been getting since the last days of January.
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