Silver Bulls Will Be Handsomely Rewarded

They say patience is a virtue.

Well, if anyone is virtuous these days, it has to be silver bulls.

They also say good things come to those who wait.I believe those good things will be coming…in spades.

Silver (SLV) reached just shy of $50 back in April 2011.A decade later, we’re still just barely above half that level.  

But that’s all about to change.

Since bottoming in March, gold (GLD) has rocketed to a new all-time high near $2,070 in early August, up 40%.

But silver’s trough-to-peak gains have put gold’s to shame.The white metal bottomed in March near $12, then soared to a $29 peak, also in early August, for a blistering 140% gain in just 4½ months.

When silver really gets going, it can surprise even the most ardent of silver bulls.And odds are it’s going to go on several more runs like this in the future.

Here’s what’s making this metal tick, and why what lies ahead for silver is going to surprise us all.

Silver’s Monetary Side

It’s widely accepted that silver is both an industrial metal and a monetary metal.But now that precious metals are in a secular bull market, silver’s monetary side is likely to have an outsized impact.

If we look at how silver compares to gold in bull runs, it turns out silver has outperformed five of the last six times.

Source: Visual Capitalist, CPM Group

That’s likely going to happen again this time, and the main driver will be investment demand.

According to the Silver Institute’s Annual World Silver Survey, silver investment demand was up 12% in 2019 over the previous year. The Institute recently reported that in the first half of 2020, investors hoarded 10% more silver than in H1 2019, mostly through buying silver-backed exchange-traded products (ETPs). As a result, ETPs have been setting successive record high levels of holdings this year.

Source:Visual Capitalist, Silver Institute

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Disclosure: 

Peter Krauth: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Metalla Royalty & Streaming Ltd. ...

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