Buying Silver Call Options to Profit from a Rise in Silver Prices

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Contents

Investing in Silver Using Stock Options: The Basics

Stock options are a form of leverage for advanced investors to boost returns of his or her stock portfolio. In the most basic definition, an option is a contract, the option to buy or sell a certain stock at a predetermined price.

Options are leverage; using leverage either increases investment returns or burns investor’s portfolios. Like options, guns are a form of leverage, if you’re hitting your target great–but you can also blow your foot off.

There are many reasons an investor may use stock options, hedging, lock-in gains, or as speculation. By hedging an investor reduces the risk of losing money during a price decline. Likewise, an investor would use stock options to reduce the risk of losing gains from selling options. And these advanced investors may wish to speculate on a stock price movement, therefore might use stock options to play the market.

Vocabulary of an Options Trader

We’ve already covered some of the vocabulary of options trading, but now we’ll dive in deeper to explain the difference between call and put options, then explain a few simple strategies option traders use to boost gains.

A call option is the right to buy shares at a certain price. Conversely, a put option is the right to sell shares at a certain price. Simply meaning, a call option means you expect the price of shares to rise. Whereas, buying a put option means you expect the price of shares to decline.

The strike price is know as the price which shares may be purchased or sold. This means, if you bought an option with a strike price of $50, you could buy or sell the shares of the option at $50.

But why would anyone want the option to buy or sell at $50? Well what if you had the option to buy the shares at $50, then the price rose to $51, you would’ve made $1 per share. Similarly, what if you had the option to sell the shares at $50 and the price fell to $49, then you could’ve sold the shares at $50 then bought the shares again at$49–a profit of $1 per share.

In both put and call options the purchaser has the option to exercise her purchase, while the option seller has the obligation to respond to the buyers request.

So, How Does This Help My Silver Portfolio?

Well, you know that the FOMC (Federal Open Market Committee) is getting to lower the target interest rate, thus causing a further decline of the U.S. Dollar and increases the rise of inflation. So, you buy a call option now, and when the FOMC lowers rates you get to profit from the price increase of silver mining companies.

Or the opposite situation where you think the FOMC is getting ready to increase the target rate, so you buy put options and profit from the fall in prices of silver mining companies.

Puts, Calls, and Conclusions

Carefully consider using options to invest because of the leveraged nature of options. Options may provide opportunities to increase your portfolio, but options can also burn through your portfolio at break-neck speed.

Also consulting your tax and investment advisers will prove to be a prudent move. Options have different tax effects your tax situation. Before investing in options, it is important to thoroughly understand the potential risks and benefits–options could either help or hurt your portfolio.

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Silver price forecast 2020 and beyond: will this precious commodity fit into your portfolio?

Precious metals, including silver, gold and platinum, have been go-to assets for centuries. In different shapes and forms, they are continuously attracting investors from all around the world looking to diversify their investments of regular stocks and bonds.

Do you also want to add some silver shine to your portfolio, but not sure how this commodity is set to perform in the next few years? Wondering how high will silver go by 2020 and beyond? Then this article is for you.

Here, we cover the basics of silver investing, review its recent performance and take a look at what the long-term silver price forecast looks like.

The basics: what you need to know about the silver price trends

Price of silver tends to move similarly to that of gold, especially when economic performance turns for the worse. During times of political turbulence and economic uncertainty, the prices of base metals, such as zinc and copper, drop due to the contracting industrial demand. On the other hand, the prices of silver and gold skyrocket, as investors usually cling to them to hedge the risks and strengthen their investment portfolios.

Both silver and gold prices often fluctuate in tandem: it is rather rare to see gold falling and silver rising, or vice versa, at the same time. Commonly, the long-term trends for both precious metals tend to mirror each other, although silver value experiences volatility more frequently, particularly on the upside.

Generally, gold gets more attention in the mainstream financial press and is often recommended by many investment advisors. However, when you read about gold picking up steam and growing in value, there’s a very good chance that silver is making similar moves. And if history is any example, those moves in silver price are often larger percentage-wise than those in gold.

Silver price analysis from 1970 to 2020: through hardship to the stars and back

To better navigate in the silver price trend, it is important to know how this commodity has performed in the past. Here is what its historical price chart from 1970 to 2020 looks like:

Throughout its history as a traded commodity, silver has seen many ups and downs, reflecting a variety of economic and political events. On January 18, 1980, this precious metal was at its premium, hitting $49.45 per ounce, the highest silver price to date. It then quickly reversed the bullish trend and lost most of its value, falling to $3.55 an ounce in February 1991.

Things became better after the financial crisis of 2008, when many have chosen to invest in both gold and silver, making these commodities one of the most popular markets of the past decade. This, in turn, helped silver to surge one more time, hitting the mark of $48.70 in April 2020. Shortly, its price entered another downtrend, experiencing unprecedented volatility and continuous change in investors’ sentiment.

During the last year, the grey metal had lost much of its shine. While 2020 was expected to be a great year for precious metals, instead, it ended up being a down year for many assets across the board, from bonds and stocks to silver and gold. The silver market faced a challenging environment, weighing on its price dynamics. The highest silver had gone was just under $17.60 an ounce.

Silver was hit hard, dropping 9% over the course of the year. On November 14, 2020, its price fell below the mark of $14 per ounce for the first time in almost three years.

Its performance during this summer has investors all excited about the future of this white metal, reflected in an 80% increase in bullish positions among futures investors. Is this rise in price only a foreshadowing of what is yet to come? Well, many silver-focused investors believe that a bull market for silver is possible, and that its prices could rise even higher by the end of this year.

According to the chart, silver has gained upside momentum.

Trade Silver Spot CFD

If history is any example, does it mean we are about to see some major value gains in silver in the future?

What factors to watch when predicting future silver prices 2020 and further

Before diving into the silver price forecast 2020, it is important to understand what actually drives the price of this commodity.

Emerging economic and geopolitical turbulence, including the ongoing U.S.-China trade war, the Brexit saga, rising tensions in the Middle East and fears of a slowing global economy, has triggered many investors to take a step towards a rather reliable asset – commodities, driving silver prices up.

With the decreasing amount of silver being mined annually, the metal is already in short supply above ground. Besides, increased industrial demand for silver is rapidly depleting the existing reserves. Adding the rising demand from international investors, the conditions are rather perfect to see gains in the silver price in the coming months and years. Therefore, even if a slowing global economy was to decrease industrial demand for silver, the high interest from investors would likely make up for that.

In regards to supply, in the last year, the top three silver producers were Mexico, China and Peru. According to the latest World Silver Survey, published by the Silver Institute and Thomson Reuters’ GFMS team, the silver market saw a 3% decrease in supply in 2020 amid reduced mined and scrap output, leading to a physical market deficit of 29.2 million ounces.

When trying to understand silver outlook 2020, it may also be helpful to look at gold price drivers. As we have mentioned before, even though silver is the more volatile of the two precious metals, it often trades in relative tandem with gold.

The strength of the U.S. dollar and developments in interest rate policies from the US Federal Reserve also affect the prices of these precious metals. For example, at the end of 2020, silver lost almost 14% amid a strong U.S. dollar and a negative impact from the Fed raising interest rates four times throughout the year.

Presently, as the U.S. currency continues to fluctuate in value, silver has made some steady inclines, gaining and maintaining a trading price that is over $18 per ounce.

Historic oil price drop
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Therefore, if you want to make accurate silver price predictions 2020 and beyond, you have to stay up to date by browsing the latest news regularly. It is also important to filter out the commentary you may hear about silver, from overly confident and optimistic silver bulls to sceptical bears who believe the metal will eventually cost less than lead. Make sure to focus on the valid data and base your decisions on real facts.

Below, we gathered some analysts’ predictions to answer the question: how much will silver be worth in 2020?

Silver price forecast 2020 and beyond: is it set to skyrocket or fall?

When thinking about how high will silver go by 2020, the experts’ opinions have split in two.

In his interviews with Palisade Research in 2020 and Kitco in 2020, CEO of First Majestic Silver, Keith Neumeyer, said the white metal has a potential to reach the $130 level. In the past, he gave even more bold predictions, suggesting silver could reach $1,000.

Although many analysts and investors do believe that the price of silver is set to rally, none of them expects a three-digit increase. For example, on September 11, 2020, Bank Of Montreal revised its forecast for both gold and silver through 2022. Bank’s precious metals analyst, Colin Hamilton, said the firm is bullish on precious metals as central banks are “falling over each other to ease,” monetary policy. He added: “In our view, this should provide support for gold and silver to trade for a sustained period above our long-run equilibrium expectations.

In its updated forecast, the bank suggests silver prices “breaching $20 an ounce to average the fourth quarter around $19.90 an ounce”. For 2020, their silver price expectations are $18.60 an ounce, which is almost 21% higher from their previous forecast.

RBC bank also increased its silver price forecast for the second semester of 2020 to $17.33 per ounce, compared to the previous $15.75. Regarding its longer-term predictions, silver is expected to trade at $17.50 per ounce in 2020.

Johann Wiebe, a lead analyst at Thomson Reuters’ GFMS division, said he expects silver prices to set around $16.75 in 2020 and $17.50 in 2020 due to rising political and economic uncertainty, which supports the precious metals market.

Analysts at Degussa, a European precious metals firm, have also increased their price target for silver, calling for a rally to $23 an ounce by the end of 2020.

On the other hand, analysts at Wallet Investor have taken a bearish stance. They refer to the commodity as a potentially “bad, high-risk 1-year investment option”. Considering their prognosis, your current investment in silver may be devalued in the near future.

This is what their silver price predictions 2020 looks like:

Based on the opinion of another popular forecasting agency, Longforecast.com, silver is expected to trade at $22.50 per ounce in January 2020, showing some volatility throughout the next year but still staying in the price range of $20.60 – $22.69 per ounce.

Here are their long-term silver price predictions for the next few years:

Analysts at Gov Capital have a much more positive outlook, saying that in by September 2024, the silver price will hit $86.260.

However, their one-year forecast looks less promising:

The bottom line

All in all, is silver a safe investment? Just like with any other asset, investing in silver gives no guarantee of financial success. According to the latest silver price forecast 2020 and beyond, you may want to add silver to your diversified investment portfolio to serve you well in times of economic uncertainty, rather than investing all of your money in this precious metal.

If you decide that silver is the right investment for you and it has good potential for future price appreciation, the next step to decide on how to invest in this commodity. There are, in fact, a plethora of options. One of them is to invest in silver through contracts for difference, or simply CFDs.

Silver Prices Today, Live Spot Prices & Historical Charts

Silver Prices Today

Silver Spot Price Spot Change
Silver Price per Ounce $15.29 -0.11
Silver Price per Gram $0.49 -0.01
Silver Price per Kilo $491.58 -3.54

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Money Metals Exchange’s interactive silver chart allows you to check the price of silver today or historical silver prices dating back 20 years. Hover over the chart to see the spot price for that particular day.

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Contents [show]

Discover the Basic Truth about Silver Prices

It is easy to understand the universal appeal of silver. Beginner and expert investors around the world choose silver more than any other precious metal. The price of silver per ounce is lower than gold, making it accessible for beginners with a limited budget.

Experienced investors recognize silver has value as both an investment and monetary metal. Diverse holdings are a key to financial success. Discover the basic truth about silver prices and what makes silver such an alluring investment opportunity.

What Is Silver?

A form of nuclear fusion produces silver. A supernova explosion is a key factor in the existence of this precious metal. Silver is slightly less malleable than gold. It has an appealing metallic luster that takes a high degree of polish.

Silver has a high degree of electrical conductivity, but copper is used more for electrical purposes because it costs less. Silver reflects almost all light and is the world’s best natural biocide, killing over 400 bacteria and viruses.

Silver is a savvy investment because it is used for countless purposes, including dentistry, medicine, windows, coins, Bullion, jewelry, silverware, air conditioning and many more. The unique properties of silver make it an essential and timeless commodity in many industries.

What is Ag on the Periodic Table?

The symbol Ag on the periodic table stands for silver. Silver’s atomic number is 47. Its density is 10.5 g/cm3, making silver denser than copper and most base metals but not as dense as platinum or gold.

Silver’s low cost compared to platinum and gold along with its unique metallic properties make it indispensable in a variety of industrial applications. Silver can attain a higher polish than any other metal. No other metal possesses as much reflectivity or electrical or thermal conductivity as silver. That’s why silver is essential for the high-tech industry. Silver also finds use in the medical applications as a biocide.

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Silver Yesterday and Today

It is estimated silver coins could be the oldest mass-produced form of coinage. Since the time of the Greeks, people have used silver coins. Ancient Persian coins date back to between 612-330 BC.

Collectible coins range in value, based on the demand, condition, and rarity. Silver coins have been used as currency around the world. Silver bullion coins and bars, as well as silver paper, are a solid investment, regardless of inflation.

The value of money fluctuates based on each government. Silver is an international way to store value. Any investment conversation will usually focus on the unpredictability of currency and stocks. For this reason, people continue to invest in precious metals such as silver and gold products, as well as platinum and palladium.

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Beyond the Silver Standard

Decades ago, the silver standard came to an end in developed countries, which means silver was no longer considered legal tender. Some countries, including the USA, continue to mint bullion and collectible coins.

An example is the American Silver Eagle, which has a nominal face value. The Canadian Silver Maple Leaf coins are legal tender valued at about USD $5 per ounce. Privately minted coins are referred to as silver rounds, which are not legal tender.

However, hard money enthusiasts may use them as investment vehicle. Most have commemorative designs and have a weight of 1 troy ounce of silver.

The current demand for silver is for industrial applications and investment purposes, including bullion coins and exchange traded products. There continues to be a strong market for silver around the world, as evidenced by the averages and NYSE.

Get to Know the Spot Price of Silver

When investors check the NASDAQ live feed in the morning or go online to visit a website to find out the current value of silver, the spot price is what matters. This refers to the price silver can be exchanged and delivered right now.

“Whether an investor is buying, trading, or selling silver, it is important to verify the spot price.”

It is the current trading value of silver and other precious metals, as well as certain other commodities. Whether an investor is buying, trading, or selling silver, it is important to verify the spot price. COMEX is reliable source to access indices for the price of silver, as the prices today will not be the same as yesterday, an hour ago, or in the future.

Smart investors check the chart for current rates right before they buy precious metals. They also verify the reliability of the resources they use, rather than relying on a comment published by a writer who might not be aware of the spot price of silver today.

From am to pm, the latest daily charts are important to make smart purchases from dealers who reply instantly. A skilled investor gets to know the markets, including real-time ratio on prices for gold, silver and oil, and has a calculator handy at all times. There are also online precious metal calculators to verify an amount quoted to try to avoid a significant loss before signing any contracts.

How is the Silver Spot Price Determined?

Traders determine silver and gold spot prices on futures exchanges. Metals contracts can change hands in London and Shanghai when U.S. markets are closed. But the largest and most influential market for metals prices is the U.S. COMEX exchange. The quote for immediate settlement at any given time is effectively the spot price.

Spot (paper) prices can sometimes diverge from real-world pricing in the markets for physical precious metals. For example, during periods of extreme stress in markets it may be impossible to obtain physical metal anywhere near the quoted spot price. Premiums on retail bullion products may surge as a consequence. When the physical market diverges from the paper market, wholesale over the counter prices may be more realistic than spot prices.

Why Can’t I Buy Silver at the Spot Price?

Retail bullion products including bars, rounds, and coins carry small premiums over spot prices. The premium includes minting costs plus the dealer’s profit. The premium also incorporates any wholesale premiums the dealer must pay to acquire the inventory.

Why Do I Have to Pay a Premium for Silver Coins?

Premiums vary according to market conditions. When demand is soft, premiums may fall, especially on secondary market products such as pre-1965 U.S. silver coins. Secondary market products – items that are being resold rather than sold for the first time as brand new – can often be purchased at a discount to newly minted products and very close to actual spot prices.

Why are Silver Premiums so High?

Premiums represent a combination of factors. For newly minted coins, rounds, and bars, the cost of manufacturing is a major factor. Mints and refiners set manufacturing charges based on the cost of labor and equipment, not on the spot price for the metal. These costs do not follow the silver price downward – or upward for that matter.

Another factor in premiums is demand. And demand for physical silver is setting records – the opposite of what is happening in the markets for paper silver. Dealers are bidding aggressively for physical inventory, putting upward pressure on premiums.

This dynamic is compounded by short supply when it comes to bullion products such as pre-1965 U.S. silver dimes, quarters, and half dollars. Mints and refiners aren’t producing any more.

Both the bid and the ask premiums for the pre-1965 coins are significantly higher than in 2020 – the last time silver traded below $20/oz. The difference is in investor perceptions.

In 2020, silver was nearing recent highs and more people were willing to sell. Currently, silver spot prices are less than half the 2020 highs and virtually everyone who owns pre-1965 coins is holding out for a recovery.

Just make sure your dealer is pricing competitively and pay attention to the premiums being offered should you wish to sell. Beyond that, higher silver premiums signal the existence of a strong market for physical, coins, rounds, and bars, and that’s good news for investors.

Silver Investment Vehicles

Silver bullion is available in bars, rounds, and coins in various sizes that are purchased by gram or ounce. There are many different ways to buy silver.

Silver Certificates

Silver certificates are referred to as paper silver, and are one way to invest in this precious metal. Exchange-traded products and silver certificates are typically easier to store. In the past, U.S. dollars have been issued as silver certificates. However, since 1965, they can no longer be redeemed for physical silver.

Silver IRA

Silver can also be a purchased in your IRA through a precious metal custodian. This is another way of contributing a dollar amount to this account to meet a certain required maximum for the year.

Silver Bullion Bars

Bullion bars, especially large ones, can be stored in a safe, at a bank, at home or you can leave them with a dealer or bank for storage. Sizes range from 1 oz troy bars to 10 ounces, as well as 100 oz bars, 1 kilo bars, and 1000 oz troy bars that weigh about 68.6 pounds.

Silver Coins

There are fine silver and so-called “junk silver” coins. Junk silver is another phrase to describe pre-1965 dimes, quarters, and half dollars – the older circulating U.S. coins that contain 90 percent silver. They weigh 24.71 grams of per dollar of face value, with 22.239 g of that weight being actual silver (the rest is copper). They don’t have collectible value, but are worth their silver content.

Modern issue silver Eagles as well as Silver Maple Leaf coins are one troy ounce, or 31.1035 g of pure silver.

Silver Futures & Options

Various exchanges worldwide trade derivatives, such as silver futures and options. Often they are traded on COMEX and currencies may vary.

Why Buy Silver? 10 Reasons to Invest in Silver Now (w/ Charts)

Jeff Clark, Senior Analyst, GoldSilver

Is silver a good investment? Why should someone buy it?

It’s natural and even prudent for an investor to wonder if a particular asset is a good investment or not. That’s especially true for silver, since it’s such a small market and doesn’t carry the same gravitas as gold.

But at this point in history, there are compelling reasons to add physical silver to your investment portfolio (and only one is because the price will rise). Here the top 10 reasons why every investor should buy some silver bullion…

#1 Silver is Real Money

Silver may not be part of our currency, but it is still money. In fact, silver, along with gold, is the ultimate form of money, because it can’t be created out of thin air (and thus depreciated) like paper or digital forms. And by real money, we do mean physical silver—not ETFs or certificates or futures contracts. Those are paper investments, which don’t carry the same benefits you’ll find in this report.

Physical silver is a store of value, just like gold. Here’s why.

• No counterparty risk. If you hold physical silver, you don’t need another party to make good on a contract or promise. This is not the case with stocks or bonds or virtually any other investment.

• Never been defaulted on. If you own physical silver, you have no default risk. Not so for almost any other investment you make.

• Long-term use as money. A scan of monetary history shows that silver has been used in coinage more often than gold!

As Mike Maloney says in his best-seller, Guide to Investing in Gold and Silver, “Gold and silver have revalued themselves throughout the centuries and called on fiat paper to account for itself.”

Owning some physical silver provides you with a real asset that has served as money for literally thousands of years.

#2 Physical Silver is a Hard Asset

Of all the investments you own, how many can you hold in your hand?

In a world of paper profits, digital trading, and currency creation, physical silver stands in contrast as one of few assets that you can carry in your pocket anywhere you go, even another country. And it can be as private and confidential as you want. Physical silver is also a tangible hedge against all forms of hacking and cybercrime. There’s no “erasing” a silver Eagle coin, for example, but that can certainly happen to a digital asset:

#3 Silver is Cheap

What if I said you could buy a hard asset at 1/70th the price of gold—and it would protect you just as well against crisis?

That’s what you get with silver! It is much more affordable for the average investor, and yet as a precious metal will help maintain your standard of living as good as gold. If you can’t afford to buy a full ounce of gold, silver can be your ticket to holding some precious metals. This is also true for gift-giving. Don’t want to spend over a $1,000 on a present but would like to give a hard asset? Silver just made it more affordable.

#4 Silver is More Practical For Everyday Small Purchases

Silver isn’t just cheaper to buy, but can be more practical when you need to sell. Maybe someday you don’t want to sell a full ounce of gold to meet a small financial need. Enter silver. Since it frequently comes in smaller denominations than gold, you can sell only what you want or need at the time.

Every investor should have some silver around for this very reason.

Keep in mind that silver coins and bars bullion can be sold virtually anywhere in the world.

#5 Silver Outperforms Gold In Bull Markets

Silver is a very small market—so small, in fact, that a little money moving into or out of the industry can impact the price to a much greater degree than other assets (including gold). This greater volatility means that in bear markets, silver falls more than gold. But in bull markets, silver will soar much further and faster than gold.

Here are couple good examples… check out how much more silver gained than gold in the two biggest precious metals bull markets in the modern era:

Gain from 1970 low to 1980 high

Gain from 2008 low to 2020 high

Gold

Silver

You might say silver is gold on steroids!

We can expect this outperformance to repeat in the next bull market, too, because the silver industry remains tiny.

#6 Silver Inventories Are Falling

Governments and other institutions have traditionally held inventories of silver. But today, most governments no longer hold stockpiles of the metal. In fact, the only countries that warehouse silver are the US, India, and Mexico.

Look what’s happened to those inventories since 1996.

A big reason governments don’t hold a lot of silver is because coinage is no longer made from the precious metal. But as you’ll see, silver is used in industry to a much greater degree now… so if future industrial needs are difficult to meet, governments will be ill-equipped to support those needs.

#7 Industrial Use is Growing

Believe it or not, you don’t go one day without using a product that contains silver.

It’s used in nearly every major industry, from electronics and medical applications to batteries and solar panels. Silver is everywhere, whether you see it or not. As Mike says in his book, “Of all the elements, silver is the indispensable metal. It is the most electrically conductive, thermally conductive, and reflective. Modern life, as we know it, would not exist without silver.” Due to these rare characteristics, the number of industrial applications for silver has skyrocketed. In fact, industry now gobbles up more than half of all silver demand.

Silver is used in a wide number of industries and products, and many of those uses are growing. Here’s a few examples…

• A cell phone contains about one-third of a gram of silver, and cell phone use continues to climb relentlessly worldwide. Gartner, a leading information technology research and advisory company, estimates a total of 5.75 billion cell phones will be purchased between 2020 and 2020. That means 1.916 billion grams of silver, or 57.49 million ounces, will be needed for this use alone!

• The self-heating windshield in your new Volkswagen will have an ultra-thin invisible layer of silver instead of those tiny wires. They’ll even have filaments at the bottom of the windshield to heat the wipers so they don’t freeze to the glass.

• The Silver Institute estimates that silver use in photovoltaic cells (the main constituents of solar panels) will be a whopping 75% greater in 2020 than it was just 3 years earlier.

• Another common industrial use for silver is as a catalyst for the production of ethylene oxide (an important precursor in the production of plastics and chemicals). The Silver Institute projects that due to growth in this industry, 32% more silver will be needed by 2020 than what was used in 2020.

There are a lot more examples like this, but the bottom line is that due to its unique characteristics, industrial uses for silver continue to expand, which means we can reasonably expect this source of demand to remain robust. But that’s not the whole story… unlike gold, most industrial silver is consumed or destroyed during the fabrication process. It’s just not economic to recover every tiny flake of silver from millions of discarded products. As a result, that silver is gone for good, and limits the amount of supply that can return to the market through recycling.

So not only will the ongoing growth in industrial uses keep silver demand strong, millions of ounces cannot be reused. That might be a problem, because…

#8 Supply is About to Fall

As you might be aware, the silver price crashed after peaking in 2020. Over the next five years it fell a whopping 72.1%. As a result, miners had to scramble to cut costs to turn a profit. One of the areas cut dramatically was exploration and development of new silver mines.

It doesn’t take a rocket scientist to understand that if you spend less time and money looking for silver that you will find less silver. That drought in exploration and development is starting to take effect.

Low prices have affected how much scrap metal is available, too.

All of this is starting to have an impact on total supply.

Silver supply has fallen three consecutive years, the first time since 1991-1993.

As much as two-thirds of silver mine supply comes as a byproduct from base metal operations (copper and zinc, for example). But these other sources of supply will clearly have an impact on the availability of new metal coming to the marketplace. These realities have set the stage for a peak in silver supply. If demand stays at current levels, it will be difficult for everyone who wants silver to get as much as they need. And don’t look now, but…

#9 World Demand is Growing

Global demand for silver is growing. Virtually all major government mints have seen record levels of sales, with most already operating at peak production. Surging demand is nowhere more evident than China and India. These two behemoth markets have long histories of cultural affinity toward precious metals. And with their populations growing (the opposite of what is happening in the West), their tremendous appetite will continue.

Here’s a couple good examples… check out the growth in silver demand in China (for all uses):

And look at the growth of silver jewelry in India:

This kind of demand doesn’t happen in a vacuum. Sooner or later there will be consequences when surging demand meets crimped supply—and those consequences are all positive if you own the metal.

#10 The Gold/Silver Ratio Favors Silver

Last, the gold/silver ratio (the price of gold divided by the price of silver) can give clues about which metal might be the better buy at any given time. Especially when the ratio reaches an extreme…

The gold-to-silver ratio averaged 47:1 during the 20th century. It’s averaged about 61:1 in the 21st century. So a ratio at or above 70 is in outlier territory and thus makes silver a good buy relative to the price of gold. You can see that the ratio sank to almost 30 at the peak of the bull market in 2020. It reached as low as 17 in early 1980. This compression in the ratio shows just how much silver can outperform its cousin gold. It also confirms it is undervalued compared to gold.

• Add all up the reasons and silver just might be the buying opportunity of the decade.

It’s hard to find an asset with a greater distortion between price and fundamentals. Not only is it a good hedge against crisis, the price will be forced up by a perfect storm of fundamental factors.

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