Captainandy
4年前
#SIL: OFF TO THE RACES....
Is Silver Going to $300?
https://www.silverdoctors.com/silver/silver-news/is-silver-going-to-300/
There are some indicators worth examining…
by Peter Krauth via Streetwise Reports
I know this might sound ridiculous to some, but I think silver could reach $300.
No, I haven’t lost my mind. After all, it’s a metal that’s known for massive rallies.
You see, when silver went through its 1970s bull market, it started from a low of $1.31 in October 1971. By the time it reached its peak in 1980, silver had run all the way up to $49. That was a 37x return.
If we consider that silver was priced at $4.20 in late 2001, a 37x return would take it to about $155. However, I think this bull market could be an order of magnitude larger for a number of reasons, the main ones being debt, credit and money printing.
As a result, I think silver’s ultimate peak could be $300, and I won’t rule out possibly even higher.
Bullish Silver Fundamentals
Most developed and many developing nations have been in multi-year or even multi-decade deficit scenarios. This now looks to have become a permanent state, at least until we reach some sort of global financial reset.
The Institute of International Finance explains how the COVID-19 pandemic response added $24 trillion to the global debt mountain last year, to reach a new all-time record high of $281 trillion.
And interest rates being maintained at 5,000-year lows will only encourage more debt. Couple that with many countries borrowing to meet interest payments, and central banks soaking up much of that new sovereign debt, and inflation havens like precious metals gain strong appeal.
Silver in particular has the added benefit of 50% of its demand being industrial. With unprecedented economic stimulus programs, many favoring green energy, silver is uniquely positioned to profit. What’s more, according to Metals Focus, silver supply was down 4% in 2020 by 42 million ounces. According to the Silver Institute, total supply will rise by 8% this year, though total demand will rise nearly twice as much, by 15%, led by industrial, jewelry and physical demand.
So, the fundamental side of silver demand is looking strong, but the technical side is also very bullish.
Bullish Silver Technicals
Let’s consider the gold-silver ratio.
As a quick refresher, the gold-silver ratio is calculated by simply dividing the spot price for one gold ounce by the spot price of one silver ounce. That’s it. Naturally the higher the ratio, the more silver ounces are needed to buy one gold ounce, and vice versa. The most bullish scenario is when the ratio is falling from a high level, ideally from above 80, and the silver price is rising.
Here’s a chart of the gold silver ratio during the 1970s silver bull market.
To me it’s very intriguing to note how recessions, which are the grey vertical bars, tended to mark troughs and/or peaks in the ratio. What’s also interesting is that when silver reached its peak in 1980, the gold-silver ratio ultimately bottomed around the same time at a level near 15, which was below the starting point near 20.
Let’s now move to the current silver bull market that I believe began in 2001. The following chart shows us silver prices since 2000, not adjusted for inflation.
Of course, silver had a tremendous run from $4.20 in 2001 to its 2011 peak at $49. It then corrected until late 2015, then moved sideways until bottoming near $12 last year in March. It had a tremendous move up to $30 within just five months and has been mostly consolidating since.
Now let’s examine the gold-silver ratio action since 2001.
Again we see peaks and troughs tend to occur (though not exclusively) around recessions (gray bars). At silver’s peak in 2011, the ratio bottomed near 33. It then rose almost constantly up to its all-time peak last March at 125, then fell dramatically to its current level around 67, as silver started to significantly outpace gold. Consider that we know from history silver always outperforms gold in precious metals bull markets. So the current action is particularly exciting for silver.
Silver Targets
But what does it all mean for how high the silver price can go? Of course, no one knows for sure. But there are some indicators worth examining for clues and suggestions.
I believe the ratio will ultimately reach a low near 15. And given the inflationary path we’re on, I think gold could peak at $5,000 per ounce. That’s just 2.5 times last August’s peak near $2,000. In fact, I think there’s even a decent chance gold could reach $10,000, which is just five times last August’s peak. But if we stick with $5,000, and an ultimate bottom in the gold-silver ratio of 15, we get ($5,000/15) $333 per ounce of silver.
Let’s look at silver price targets from another angle: inflation.
If we consider inflation-adjusted silver prices going back to 1970, we see that the peak reached in 1980 was actually $120/ounce in today’s dollars, and that’s using government sanctioned inflation statistics, which tend to be well below what we experience in everyday life.
Considering the old way of calculating inflation, which the U.S. abandoned decades ago and I reference below from Shadowstats.com, a realistic inflation rate would have averaged 7%–8% since 1980 (triple official inflation), which would mean an equivalent silver price of $240–$360 dollars at the 1980 peak.
My gold-silver ratio target for silver of $333 is comfortably within the range of $240–$360. If we take the mid-way point between $240 and $360, we get $300. I think that’s as good an estimate as any of where silver can peak in its current bull market.
On this basis, the silver price would need to be up by more than 10x from current levels to reach its ultimate high. Imagine for a moment, if silver were to soar tenfold from here, what the silver producers’ and silver explorers’ share prices would do. It’s not difficult to expect simply spectacular returns. Which is exactly why it’s so attractive to allocate to this space, while being diversified across several stocks, as it’s impossible to know which will do best. Still, odds are very good that if silver goes up by a factor of 10, the average silver stock should easily double that, and be up by a factor of 20, while the most successful juniors could gain 50x or more. That would simply be a repeat of previous bull markets.
Larger silver producers and royalty companies should be seen as core positions to be held for the long term. The more junior explorers should be treated more cautiously as speculations, on which to take profits when they materialize. Selling half of one’s position on a double would be especially sensible.
In any case, I believe it remains early days for silver and silver stocks. I expect to see much higher prices ahead in the metal and the equities. And in my view the current bout of weakness is an opportunity to buy or add to positions in this space. Remember, at $26 silver is still nearly 50% below its all-time nominal high, while gold is just 10% below its all-time nominal high. Silver is clearly the better relative bargain.
In the Silver Stock Investor newsletter, I provide my outlook on which silver stocks have the best prospects as this bull market progresses. Many offer 5x to 10x return potential in just the next few years, especially as silver heats up.
I think silver is currently at or very close to its bottom, but that its ultimate peak could well be in the $300 range.
Either way, silver is headed much, much higher.
–Peter Krauth
Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in precious metals, mining and energy stocks. He is editor of two newsletters to help investors profit from metal market opportunities: Silver Stock Investor, www.silverstockinvestor.com and Gold Resource Investor, www.goldresourceinvestor.com. In those letters Peter writes about what he is buying and selling; he takes no pay from companies for coverage. Peter has contributed numerous articles to Kitco.com, BNN Bloomberg, the Financial Post, Seeking Alpha, Streetwise Reports, Investing.com, TalkMarkets and Barchart, and he holds a Master of Business Administration from McGill University.
tootalljones
5年前
silver stocks look very strong now. They are heralds and say the path is up. I think for sure we see an all time high in gold in 2 to 3 years. If Silver can approach 50, then SIL will be up 350% and SILJ 450%....
Remember, silver has a good habit of going way past the relative highs of gold in all bull markets. Silver stocks in the 1930s went up sometimes a 1000% (or more) in that PM Bull market.
If Gold goes to 3000, and it will over the next 5 years, silver will be somewhere close to 100 bucks. In such a scenario, the U.S. dollar would experience a steady decline, and the prices of American real estate would perhaps double, but Silver stocks might be up 1000 percent who knows. I am predicting a rerun of the late 1970s PM bull market.
Trump is demanding the dollar be crushed and it will be crushed, but either way, precious metals wins during the election, and I think the market is pricing this conclusion in now.
If either Trump is reelected, and he will be, the dollar will really get creamed based on the raw math, and if the DEMS win, precious metals priced in dollars will skyrocket the morning after the election.
tootalljones
5年前
I have deployed almost all of my funds into SILJ, the little brother of SIL. SILJ is far superior to SIL as a pure silver vehicle because many if not most of the SIL components have huge productionin base metals and even GOLD, and I do not expect these metals to rocket like pure silver stocks will.
Here are my price projections and targets, fwiw:
tootalljones Friday, 09/20/19 10:18:08 AM
Re: None 0
Post #
2322
of 2331
HISTORY LESSON AND OTHER PROJECTIONS: silj is my preferred vehicle of today's current Big 4 (gdx, gdxj,sil and silj), and it now prices at $10.16, with silver the metal currently 17.76. All of these 4 will do fabulously well if we are in a bull market, or what some term, a resumption of the bull market of the last decade which paused starting in 2011.
Remember, bull markets in any commodity begin when nobody is looking. One can here theorize that this new bull or second half LEG, began when gold broke through long term resistance at around 1360 this past summer.
Here are some rough price targets below. I think it is clear Trump is a major inflationist. The odds are overwhelming he wins reelection but even if not, if the DEMS win, gold and silver will continue to go higher.
The reason will gravitate to silver vs. gold is that silver is simply a better value.
Historically in the 1930s, and from 1975 to 1981, and from 2002 to 2011, silver has far outperformed gold. So too with silver stocks even more so than gold stocks, and by an even bigger percentage.
And in the back 3 years of these precious metals bulls silver exploded higher and higher, while gold still did very good without question.
I am looking at something like this:
Year end:
2019: Silver at 20, Silj at 12.50
2020: Silver at 28, silj at 25
2021: silver at 42, silj at 45
2022: silver at 65, silj at 65 (price exploding)
2023: Silver at 100, silj at 120 (Bitcoin mania year)
vs. gold during the same period
POG may move 100% (easily) to $3000, and GDX, its primary gold stock proxy, which today is 28, will be 95 bucks. (a 3 to 1 ratio to the metal), but with silver, we see the metal up 500%, and silj up 600%.
These moves are similar to what has happened in the past PM bull market. And the ratios are not perfectly in sync, NOT PERFECTLY SYMETRICAL, AS ONE WOULD EXPECT, IN BOTH THE SILVER METAL AND THE SILVER STOCKS, but that is the way prior ones have been in reality, but even more extreme, believe it or not.
for instance, in this century's earlier bull market, silver started priced at an incredible 4 bucks and finished at $49, up an amazing 1200%, and silver stocks even greater percentages
So here, history will show silver bottoming at $13.50, bu but finishing up almost 800%, with many premiere silver stocks (since silj did not exist until recently), being up well over 1000%.....
You can say I am dreaming, but as you can see, I am suggesting an outline to this current bull market that is less extreme (but still incredible) than this earlier bull. THE REALITY IS THIS, I am suggesting outrageous returns but these returns would be substantially less than the other 3 PM bull markets of the last century.
If I gave you the numbers for the earlier 2 bull makrets, the ones of the last century, and extrapolated to our current bull market, nobody would believe me. There were stocks in the 1930s bull market, for instance, that went from 5 to bucks in price to over $300 bucks. YUP!
For the 1970s bull market, silver went from around a dollar (remember the term, a silver dollar) to $50 bucks.....but in truth, this involved manipulation by the HUNT brothers, which only lasted a month, but silver for perhaps 6+ months was up there around $25 bucks (before the last blowoff "hunt brother" mania under which it doubled in several months.
So this was once again, a far wilder bull market than what I have just sketched above.
So my predictions above are the least crazy, gold and silver bull market, of the 4 i have identied. In other words, the most conservative price projections of all 4 PM Bulls. Why there are PM bulls is another question entirely, for another day. If you don't think such things exist any longer, you would be wrong. Look at Bitcoin, considered the modern electronic gold, it is up from 10 bucks to 10,000 as I type (and down from around 20,000), over the past 5 or 6 years.
tootalljones
5年前
silj is my preferred vehicle of the Big 4, and it now prices at $10.16, with silver the metal currently 17.76
Here are some rough price targets below. I think it is clear Trump is a major inflationist. The odds are overwhelming he wins reelection but even if not, if the DEMS win, gold and silver will continue to go higher.
The reason will gravitate to silver vs. gold is that silver is simply a better value.
Historically in the 1930s, and from 1975 to 1981, and from 2002 to 2011, silver has far outperformed gold. So too with silver stocks even more so than gold stocks, and by an even bigger percentage.
And in the back 3 years of these precious metals bulls silver exploded higher and higher, while gold still did very good without question.
I am looking at something like this:
Year end:
2019: Silver at 20, Silj at 12.50
2020: Silver at 28, silj at 25
2021: silver at 42, silj at 45
2022: silver at 70, silj at 80 (price exploding)
2023: Silver at 115, silj at 140 (Bitcoin mania)
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