Monday, March 28, 2016

It is Silver With The Biggest Upside Potential in 2016 & Beyond

Silver is likely to continue its uptrend in 2016 in beyond with a number of key factors working in the white metals favour

All Time High of $50.00

In March 2011, Silver reached levels close to $50.00 for the first time since 1979 when the hunt brothers cornered the physical silver bullion market.  Today's price being $15.30 more than 300% away from this level and hence a long way off the recent high. The 10 year low is around $10 meaning just a 65% fall in the price would retest these levels.

There looks to be substantial upside price potential, firstly its association with gold means it could run based on it being a monetary metal, or due to heavy industrial usage, new technology patient applications on a mass scale or a combination of investment, medicine, technology and industrial, & jewelry usage making silver a heavily demanded metal due to so many of its properties being both sought after and uncommon in the metal world.

Gold to Silver Ratio

There is a significant upside for the Silver which got as low as 32:1 in 2010, currently in 2016 we are at a 10 year high in the Gold to Silver ratio which historically is also near the highest recorded at 80:1. Silver has a massive potential to increase in this ratio during 2016 and over the course of this precious metals bull run. 

Gold to Silver Mining Ratio 

Typically, 10 ounces of silver are actually mined for every 1 ounce of gold mined. On an annual basis, roughly 900 million ounces of silver are mined overall compared with just 90 million ounces of gold, however potentially The below ground ratio of silver to gold has been estimated at 17 to 1.

The ratio of investment grade gold existing in bullion form is as much as five times that available for silver.

ll the gold ever mined has been estimated at 160,000- 170,000 tons of gold or roughly 5 billion Troy Ounces. A reasonable estimate for the total amount of silver mined is 56 billion Troy Ounces. This makes the “ever mined” ratio roughly 11.2 to 1.

Gold to Silver Historical Ratio *

In 1792, the gold/silver price ratio was fixed by law in the United States at 15:1, which meant that one troy ounce of gold was worth 15 troy ounces of silver; a ratio of 15.5:1 was enacted in France in 1803. The average gold/silver price ratio during the 20th century, however, was 47:1,

The Gold to Silver spot price ratio is now at around 80:1 so historically way above the 1700's, 1800's and 20th century ratios, and given the amount of silver consumed vs gold it seems certain the ratio will come back to resemble earlier times in our history.

Silver is More affordable

As its around 80:1 vs Gold, it is far more affordable to the average person, this alone will be a big volume demand driver as popularity as an investment or any new high usage application such as Solar Panels or Catalytic converters, Silver supply could easily get overwhelmed with any kind or new or significant demand increase.

The Commodities Cycle

Commodities prices have had a rough time of it the last 18 months with many base metals recently bouncing off 10 year lows, this has caused many producers to move into care and maintenance and discontinue operations such as nickel and iron ore mines, as the majority of silver is produced as a by-product from these operations necessarily the supply side of silver had been reduced, this should go a long way to driving the price up as the supply side reduction will mean a higher price point in the futures market as producers out-bid each-other to ensure supply of the essential element.

Joseph Gale

Silver to Gold Ratio Charts -

#Silver #SilverNews #SilverGold #1for1 #Galeforcesales #SilverInvestment

* Historical Ratio Data -

Gold and Silver Supply Data -

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