We all know silver is a small market and therefore volatile and if you’ve participated in one of its spikes, you know the gains can be both quick and breathtaking. What some investors may not be aware of though, is that those spikes have historically not lasted long…
Here are all of silver’s biggest spikes since 1970, as measured from when it first broke out to its peak. I also added how long each of those runs lasted.
In almost every case silver’s big run-up can be measured in months. None last more than a year. Again, this is not measuring bull markets, just the spikes. However, in many cases the silver price didn’t move all that much prior to the spike—and usually trailed gold—but when it took off, it rose like a rocket.
There’s another observation to be aware of. Silver’s volatility works both ways: in most cases the price deflated after it peaked, handing back much of those gains. The pattern is almost predictable: ignite, spike, deflate. Many times in the middle of a bull market.
Pulling all this data together tells us investors three important things:
- It is normal for silver to rise very sharply. The average gain of all spikes since 1970 is 150.4%.
- The duration of silver’s spikes is short. The average duration has been just 7.4 months.
- Big runs in silver can happen anytime, but the average time between spikes has been 3.5 years.
- One must buy before the spike kicks in because, once it erupts, you’ll be chasing a train that’s already rolling down the tracks. You’ll not only pay a higher price but a higher premium as well, since demand usually jumps when prices do.
If one accepts the premise that there will be an accounting between the price of gold and silver and the amount of excess currency creation, then we can expect at least what we saw in the 1970s. It could truly be breathtaking.
Editor’s Note: The above version of the original article by Jeff Clark, has been edited ([ ]) and abridged (…) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
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