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Talk about having an opportunity handed to you on a silver platter! Whether it’s buying shares of SLV or purchasing physical bullion, there really isn’t much of a downside at this point. If you haven’t staked your claim, now’s a good time to do it.
Silver put in a double-bottom last fall. It tested its December 2015 low, but couldn’t manage to break below it. Now, after a rally off that bottom, we have a pullback. This could be the opportunity we’ve been waiting for! Look at the chart below of the iShares Silver Trust ETF (SLV) and you’ll see what I mean.
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| Image credit: StockCharts.com |
You can see that the SLV, and silver itself, are in big downtrend. It’s just 6% above a bottom that silver tested last year AND in late 2015. The price of this metal is coiling up like a spring and, for even greater upside, you might consider the Global X Silver Miners ETF (SIL) because, when the metal goes up, mining stocks tend to SOAR.
Not only that, the Gold-Silver Ratio — the number of [troy] ounces of silver it takes to buy one [troy] ounce of gold — is at a historic high.
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This ratio is one of the most reliable “buy” indicators for silver. When it climbs above 80 … you want to grab it with both hands…We’re closing in on a MAJOR REVERSAL of this ratio, meaning gold must decline (unlikely, as gold’s bull market is just beginning) … OR SILVER MUST RISE!
Talk about having an opportunity handed to you on a silver platter!
Editor’s Note: The above excerpts* from the original article have been edited ([ ]) and abridged (…) for the sake of clarity and brevity. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
(*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.)
And, that brings us to the bigger question on “the Silver Platter.” Since the Silver stocks are leveraged to the price of Gold, how high- how much leverage will the Silver stocks have to the price of Silver………with Silver already leveraged to Gold per the 70’s.
In the 70’s from this point, Silver to the highs was about a 10 bagger. Gold was about a 4.25 bagger.
Yet, I have a chart of a Silver explorer from the 70s that bottomed in 1979, yet rose about 12x up to the silver top.
No doubt that this time around, the leverage in price will be increased due to the massive number of USDs that have been printed………….through debt monetization. Just look at the Fed’s numbers of Dollars printed.
Holding physical Silver and Gold is the safe play with a big potential leverage- no doubt- but to hold some percentage of Gold and Silver Stocks for even higher leverage seems logical.
With that said, the real leverage will be in the Silver Explorers instead of he producers. Producers in the 70’s were the safe plays up to this juncture in the 70’s since explorers with no income from production could be shorted heavily. Is the same true this time around? My expectation is “you betcha.” The reason Silver explorers will likely carry much more leverage at this juncture going forward is a simple one.
To date, true silver explorers have had to print shares to survive since they were not producing. Going forward from this juncture “as I read it”, most explorers will have money chasing them- read little dilution since smart money knows that a higher premium will be given to decent explorers going forward as “Silver reserves will gain escalating prices” from this point due to rapidly rising prices of “reserves- Silver in the ground.” The same will be true for the Gold sector.
Why now? Well, the Street has a rule for the PM sector that is unheard of in other sectors- “All old tops must be re-tested!” Yet, with the coming upside break-out in Gold and Silver versus the 70’s charts- this “rule” will be abandoned. Rising prices for good reserves in the ground will now go parabolic. Thus, the chart of the Silver explorer from the 70’s that I mentioned, above.
Back when I first started my attempt to self educate on the markets, a gent named Ed Gofsky from the Chicago area posted about little pm stocks that ran from around a buck, up to $400………….that is a 400x gain……… after he researched the subject in a library in Chicago. Ed spent a bunch of time pulling that information out of newspapers from the 70’s, if memory serves.
Unfortunately, he never noted, nor did anyone ask him- “when the runs took place”- as in how late in the cycle. Thus, many have in recent times said that Ed was all wet, or that it will not happen this time.
I disagree based on the one explorer chart of Silver that I found from the late 70’s. The explorers moved late due to rapidly rising premiums on “reserves in the ground” that were held back until Gold/ Silver made their final parabolic run………………… the start of the run for both on the next break-out higher from here.
Thus, one could have held out until this part of the cycle in the 70’s and still relatively enjoyed practically “the whole PM Bull Market.” I believe the same is true, today, since the charts are mere twins of the 70’s for all things PM.
If one has a few extra bucks, one might want to spread them around a few PM explorer stocks. It is only my opinion, but my opinion is that any explorers that are still trading with no obvious risk should you read up on them; are very likely to be around till the end of this massive PM Bull.
By all means, study up and DO YOUR OWN DUE DILIGENCE in terms of the above. The massive number of Dollars printed suggest huge inflation to come in the USA. The number one hedge for inflation- one that historically also pays you a premium early on is Gold and Silver. Historically, Silver carries the highest premium for reasons I wrote, above- just look how Gold has risen to 2 1/2 times the 80’s high while Silver has not topped the 1980 high, yet.
Have a great Easter……………
……………..GR
Great Article, Lorimer……………….on a Silver platter, none the less. If history repeats, so many will look back at this day and say, “Why, oh why, did I not listen to Lorimer? April 19th, 2019 is about as good a time as it gets, eh? Silver at $14.98……………………..”IT’S LAST CALL AT THE BAR………..THE SILVER BAR.” In fact, I think that would be one great name for an article on Silver!
…..going to $300?……….(20x)
…..$400?…………………..(26.67x)
….$500?……………………(33.33x)
….$600$…………………..(40x)
….$700?…………………..(46.66x)
….$800…………………….(53.33X)
Any of those multipliers will kick inflation’s bottom in all probability. Many will laugh, but he who laughs last, laughs with a Silver shine.
Have a wonderful Easter, Lorimer.
Goldrunner