• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 9 mins americavchina.com
  • 11 mins Greta named Time Magazine "Person of the Year"
  • 21 mins DUMB IT DOWN-IMPEACHMENT
  • 4 hours Emissions Soar as Flaring Frenzy Breaks New Records
  • 17 hours Tories on course to win majority
  • 18 hours Winter Storms Hitting Continental US
  • 9 hours Aramco Raises $25.6B in World's Biggest IPO
  • 2 hours POTUS Trump signs the HK Bill
  • 16 hours WTO is effectively neutered. Trump *already* won the trade war against China and WTO is helpless to intervene
  • 21 hours 2nd Annual Great Oil Price Prediction Challenge of 2019
Alt Text

Will Silver Prices Continue their Incredible Run

Silver has risen higher relative…

Alt Text

When is the Best Time to Buy Silver?

Silver has outperformed most of…

Alt Text

Next Stop $50 for Silver

Silver took a multiyear hit…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

Why Silver Could Outshine Gold

The latest round of risk reduction by global hedge funds bashed silver (SLV), knocking $2.50 off of the $19.50 high seen in the heady days of May.

Today we have made it back to $18.67, indicating that the white metal is holding up far better than it has in past sell offs.

Silver has always been an odd duck in the precious metals world, with half of the demand coming from industrial applications, and the other half coming from monetary demand.

The recent strength suggests this balance is now shifting in favor of the latter, and could have much farther to run. At 67 times, silver is at the bottom end of its historic valuation relative to gold, which has ranged between 12:1 (Remember the Hunt Brothers?) and 70:1.

Geologically, silver is 17 times more common than the yellow metal. All of the gold ever mined is still around, from King Solomon's mine, to Nazi gold bars in Swiss bank vaults, and would fill two and a half Olympic sized swimming pools.

But most of the silver mined has been consumed in various industrial processes, and is sitting at the bottom of toxic waste dumps. Silver did take a multiyear hit when the world shifted from silver based films to digital photography during the nineties.

Now rising standards of living in emerging countries are increasing the demand for silver, especially in areas where there is a strong cultural preference for the jewelry, as in Latin America.

That means we are setting up for a classic supply demand squeeze. I think we could run to the old high of $50/ounce in the next economic cycle, if another monetary crisis doesn't get us there first.

Since silver can trade with double the volatility of gold, this forecast could prove conservative.

You can buy the September futures contract at $19.07, where a 5,000 ounce contract worth $95,350 on the COMEX carries a margin requirement of only $6,750. And if you had any doubt about the long term monetary value of silver, look at the chart below of the silver content of a Roman denarius over 200 years showing a 94% decline.

Silver Content of Roman Denaruis

Courtesy: Mad Hedge Fund Trader




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play