Colossal Move Ahead In 2021? Silver Prices Could Surge To $75/Ounce

Silver Prices Could Be Setting up to Skyrocket

If you are not looking at silver prices, you could be making a big mistake. The gray precious metal could be set for a colossal rally in 2021 and beyond.

Forget everything else and just look at silver valuations. Silver seems to be trading for pennies on the dollar. It could be the next big trade in the making.

silver prices

Silver American Half Dollar Collectible Coin in Hand. Closeup Photo.

Look at the chart below for some perspective. It plots the gold-to-silver ratio. Essentially, this ratio tells us how many ounces of silver it takes to buy an ounce of gold. For long-term Lombardi’s Letter readers, this shouldn’t be a new type of chart; it has been presented here before.

If the gold-to-silver ratio is above 80, silver is considered to be undervalued. If the ratio is below 40, then the gray precious metal is deemed to be overvalued.

Chart courtesy of StockCharts.com

Over the past 35 years, the gold-to-silver ratio has pretty much done one thing over and over again: once it crosses above 80, it almost always makes its way back down to 40 (and in some cases below 40).

Not too long ago, the gold-to-silver ratio crossed above 100, suggesting that silver is selling at dirt-cheap prices, relative to gold. That ratio has started to trend lower, and one must wonder if it will drop to 40.

Why $75-per-Ounce Silver Could Be Possible

Assuming gold prices don’t change at all (around $1,840 per ounce at the moment), for the gold-to-silver ratio to get to 40, silver prices would have to be around $46.00 per ounce. Currently, the gray precious metal trades around $24.00 per ounce. This means the price of silver could surge by 91.7%.

But it would be slightly childish to assume that gold prices are going to remain the same.

You see, central banks around the world have been making a very strong case for owning the yellow precious metal. Even the big banks that didn’t really like the metal, almost all of them seem to be in favor of owning it now. So it’s likely that gold won’t remain at $1,840 for too long. I’ve even seen targets for gold as high as $3,000 per ounce.

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Disclaimer: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and ...

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