Silver rallies – plays ‘catch up’ to gold’s gains

Silver rallies – plays ‘catch up’ to gold’s gains by Peter Spina for Silver Seek

“Meanwhile, the gold to silver ratio had been at an “extreme level from a historical perspective,” with silver lagging gold significantly for many years, said Peter Spina, President of The ratio was several ounces from the 100 mark which means that it would take 100 ounces of silver to buy an ounce of gold. On Thursday, the ratio was at about 88 ounces of silver to one ounce of gold.

Gold’s gains so far this year have helped to “light a spark under the silver price and with many primary silver producers struggling at mid-teens silver levels, years of underdevelopment from exploration cutbacks to abandoning projects has created a perfect storm for silver to now revive in a bit way,” said Spina.

Near-term the key for silver will be if gold breaks above $1,450 an ounce, and if gold moves to $1,500 and above, it will send silver up to test its next technical level around $20 an ounce, he said. Silver futures haven’t traded at levels that high since 2016.

The really big gains will be from the silver miners like First Majestic Silver Corp.AG, +4.99% and opportunities have been showing up in other small capitalization miners like Fortuna Silver Mines Inc. FSM, +2.30%  and Endeavour Silver Corp.EXK, +9.48% said Spina, adding that he has “been accumulating many of these juniors over the past several months in anticipation of them doubling and much more as silver makes a move towards $20.”

He said gold and silver investors have not missed much of this rally, though in the short term the rally may be overextended when it comes to some miners. Over the coming months and year, however, Spina believes he sees “one of the best risk/reward [opportunities] in the gold/silver sector since I started buying juniors as a teenager, some 25-[plus] years ago.”

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Silver Seek

Various authors reporting on the silver precious metals market.