Just over one year ago, colleagues E.B. Tucker and Dave Forest laid out the contrarian case for buying gold. (Catch up here and here.)
Since then, gold is up 27% in U.S. dollar terms.
And as we showed you last week, the gold rally has plenty more gas in the tank.
So is its sister precious metal, silver.
As we’ll show you in today’s dispatch, if you’re a gold bull right now, you should be a raging silver bull.
Take the last time gold and silver prices soared together. That was in the wake of the 2008 global financial crisis.
The S&P 500 bottomed in March 2009. From there to its peak in September 2011, gold shot up 106%.
But from March 2009 to its peak in April of 2011, silver skyrocketed 274%.
That’s nearly three times gold’s gain.
Regular readers know that E.B. heads up our Strategic Investor and Strategic Trader advisories.
And when he’s not researching new investment opportunities for his readers, he’s building a fast-growing precious metals “royalty” company. (It finances new mines in return for a share of the profits – or royalty – on the gold and silver they produce.)
This has made E.B. a connoisseur of the precious metals market cycle. And it shows…
Last December – with gold trading hands for $1,238 an ounce and still 35% below its 2011 peak – he predicted gold would hit $1,500 an ounce. That happened on August 7.
And in July, in an interview at the Sprott Natural Resource Symposium in Vancouver, he said silver would hit $20 this year.
Silver was selling for $16.26 when E.B. made his call. At writing, silver is trading for $19.40. That’s a 19% gain from when E.B. put the rally on folks’ radars in Vancouver just five weeks ago.
Don’t get us wrong. E.B. believes there’s a monster rally still ahead for gold.
But he thinks silver will do even better.
That’s because silver is historically cheap right now in gold terms.
Look at the following chart. It tracks how many ounces of silver it takes to buy an ounce of gold. When the gold-to-silver ratio is high, it means silver is cheap relative to gold.
As you can see, at the start of July, silver was at its cheapest in gold terms since October 1992. And although the ratio has fallen since… silver is still historically cheap in gold terms.
It’s one of the reasons E.B. likes silver so much right now. As he puts it…
When the ratio hits extreme readings… it signals turning points in the precious metals markets.
In June, gold rose 8%. But silver sat flat. This helped push the gold-to-silver ratio to a 26-year high of 93 on July 3. It took 93 ounces of silver to buy one ounce of gold. And that’s when silver really took off. It’s up 29% since the start of July.
Remember, silver usually outpaces gold when the precious metals rally.
As we mentioned up top, the last time the two metals rallied together, in the wake of the 2008 crash, silver delivered gains three times larger than gold delivered.
But over the past 12 months, silver is up just one-third more than gold (37% versus 27%).
As E.B. has been telling his readers, gold is in the early innings of a long-term rally. But silver is setting up for even more explosive gains over the next few months.
Here’s how he recommends you profit…
First, you may want to look into owning at least some physical silver. Just like with gold, physical coins are a good starting point because they represent a real, hold-in-your-hand asset.
But you’re going to see the biggest returns in the silver mining stocks. Like with gold stocks, they give you leverage to the price of the physical metal. When the silver price moves an inch… silver stocks move a mile.
E.B. is not a fan of exchange-traded funds (ETFs) when it comes to buying mining stocks. They’re easy to buy and sell instantly. But if you dig deep, they own a lot of laggard companies you don’t want to touch.
As E.B. says, all mining firms are not created equal. So this is one sector where it pays to own the best.
In Strategic Investor, he covers the gold and silver mining stocks with the most profit potential.
For instance, Pan American Silver (PAAS) is up 47% since E.B. added it to the Strategic Investor model portfolio last November.
And shares in gold exploration company Aurion Resources (AU-V) are up 156% since E.B. added this company to the model portfolio in August of last year.
For more on how to take Strategic Investor for a test drive… and get access to E.B.’s upcoming recommendations… read on here.
Silver is different from gold in more ways than you may think.
Silver is the world’s best conductor of electricity… it’s the most reflective metal… and it also produces some of the world’s strongest alloys.
About half of all demand for silver is for industrial uses. That compares with about 7% of all demand for gold.
In fact, silver is so important to one fast-growing energy market that E.B. calls silver the “energy metal.”
We’ll have full details on that for you tomorrow. So stay tuned.
As we mentioned above, the gains in gold and silver are just getting started.
You may already own gold and silver stocks, bullion, or some other gold and silver investment.
But when it comes to gold, our master trader Jeff Clark believes you could be missing out on serious gains if you’re just buying and holding.
He recently uncovered a way to earn up to 10x bigger gains in the gold market, in a fraction of the time. And it doesn’t matter what happens to gold along the way.
He released a special presentation with all the details. Watch it right here.
Regards,
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Chris Lowe
September 4, 2019
Lisbon, Portugal