Firstly, thank you to our guest writers for such informative pieces. Mat’s comment that “when the US economy bubble pops, as many predict it will, there will not be a bandage big enough” was a great one. This forms a great springboard into this week’s article, as I’ve decided to shine the spotlight on gold’s little sister waiting in the wings – silver. 

Of course, it is true that the gold prices give us economic information and helpful currency predictions. But silver is the twin of gold in so many ways, different colour, even different industry uses, but a historical dancing partner to gold throughout millennia.

 

Two ounce Silver Queen's Beasts Unicorn Coins are produced by The Royal Mint

 

Money Morning are firmly focussing on Silver this week:

“Now that the Jackson Hole central bankers’ meeting is behind us, markets can digest its effects. And despite U.S. Federal Reserve Chair Jerome Powell reiterating his plans for steady rate increases, the dollar has waned since late last week. The possible new hawkishness that came from the Jackson Hole meeting was also bullish for silver prices.” (Bullish means the price looks set to enjoy a sustained period of rises)

Their Resource Specialist, Peter Krauth, continues: “After an initial bounce from its recent lows, the price of silver has been performing well this week. Although silver prices did initially plateau and then retreat again last week, the metal formed a higher low, which bodes well for near-term action. Last week, I told you the silver bounce had been timid but conditions were ripe for a strong rally.”

 

The Market Oracle have also focussed on Silver in the last 24 hours:

“The Dow/Gold ratio is a very reliable measure for where we are on the long-term economic timetable. It allows for an accurate reading of key economic conditions that are present at a particular period of time. With regards to silver, the period after a Dow/Gold peak is generally great conditions for silver prices. After every major Dow/Gold ratio peak over the last 100 years, silver has gone to new all-time high prices, except for the period since the 1999 Dow/Gold ratio peak. See the silver vs Dow chart below:

 

Dow/Gold ratio peak over the last 100 years

 

Interest Rates have been mentioned a lot in our Bullion Academy over the last few weeks, mainly in relation to Gold. But I was very interested to learn the following:

“Interest rates are also a very important economic measure, especially for silver prices, as explained previously (explained for gold, but also applies to silver). A period after a major interest rate bottom is generally great for silver. After the last major interest rate bottom (around 1941), silver went on to make new all-time highs. We appear to have another major interest bottom (in 2016) and it is in fact lower than the one of 1941. This means another key measure tells us that conditions for silver are more favourable. Therefore, the chances of silver going on to make new all-time highs are extremely good.” (Hubert Moolman, also of The Market Oracle)

Talk Markets are also buzzing with anticipation of an upward move in the price of Silver: “Year-to-date, the gray precious metal prices have declined more than 15%. From its highs in 2011, silver is down about 70%. With this, one could be asking if silver is still worth the investment. Put simply, yes, it is.

Saying the very least, silver prices are too low to ignore. Remember the old investing adage: buy low, sell high. Silver could be that opportunity. You see, in the short term, it’s possible that silver prices decline a little more. Why? This could be mainly because of speculators just adding on to their short positions and light-hearted investors fleeing due to losses. However, in the long term, the precious metal could reward investors immensely.”

That last point is worth some encouragement to Bleyer’s readers because it’s not a great feeling to purchase some precious metals and then the price falls for a sustained period of time. But whereas “light-hearted investors” lose their nerve and sell out at a loss, it is worth encouraging ourselves to hold on and wait for the next mountaintop.

Many of our articles look at the rise of Gold after a market correction but what happens to the price of Silver? Money Metals Exchange explores this clearly yesterday in chart form as follows:

 

Rise of Dow Jones, Silver and Gold prices after a market correction

(Source: Money Metals Exchange) 

In summary, “You can see quite clearly that as the markets began to correct lower, the precious metals disconnected and jumped higher.” We hope this has been informative for you.

If you’d like to talk through the options available to you, please call one of the Bleyer team on 01769 618618 to discuss the very wide choice of investment brackets, including whether to invest in bars or coins.

 

Limited edition one troy ounce Silver Wolf Coins are produced by The Royal Canadian Mint.