There continues to be a lot of speculation around whether silver could achieve the kind of break-out rally we saw from gold this year, with potential further gains for pure-play silver mining stocks as well. After all, we witnessed a similar break out by silver in the wake of the Global Financial Crisis in 2009. Could it happen again?
Silver has been pushing steadily north in 2024, having broken out of an historical trading range in recent years between $18-$22, but the silver price hit $34/oz in mid-October. Silver bulls are dreaming of the heights it achieved back in 2010. Can the price get back there?
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Many commodities traders will be looking at the silver to gold ratio. which is around 80+ in gold's favour at the moment. Historically, the median ratio (going back to 1800) is 30:1. Silver looks incredibly cheap compared to gold price action at the moment. In five or six of the last seven gold bull markets silver has gone on to outperform in its own bull market (on a percentage basis).
Another bull case is of course the level of industrial buying for silver, especially because it is needed for any projected transition to net zero energy sources like solar power. Much of this buying is coming from companies in China, and there remains a significant concern that any economic slowdown in China could have a knock on effect on the silver price.
For our subscribers we share some of our thoughts on the supply/demand dynamics of silver following a call with silver market specialists, plus some further medium term technical trend analysis.
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