Normally the word late has a negative connotation. Not in this case. The historical fact that silver is lagging gold can be used as an edge for investors. Being late is great. Not needing to be first translates into less risk. Gold being in a secular bull market makes it pricey to attain. Silver prices in comparison are just starting to rise. Typically silver outperforms gold later down the road.
This isn’t all. Did you know that recovering silver in most cases isn’t worth the effort? While gold gets “refurbished” out of all kind of junked tech items, silver isn’t. This means it is lost and its overall supply diminishes over time.
Gold/Silver Ratio, Monthly Chart: Being Late Is Great
Gold-Silver Ratio, monthly chart as of May 27th, 2020
At this moment of time it takes about one hundred units of silver to purchase one unit of gold. The monthly Gold to silver ratio chart above illustrates that nine years ago it took only thirty one units to accomplish the same purchase. Relationships like these rarely stay long in extreme measurements like the two mentioned. Consequently it is quite reasonable to assume we find ourselves near the 200 moving average, a value between those two extremes more likely in the future. Once silver who is always late and lags, catches up with golds extension, this medium gold/silver ratio zone will be reached. This means there is a force in place driving silver prices still higher.
Silver, Daily Chart: Catch Up Game, A Strong Climb
Silver in US Dollar, daily chart as of May 26th, 2020 b
We posted numerous entries and exits live in our free telegram channel in recent weeks. One reason that supports our activity is the strength of the up move. Not only did we have a staggering above fifty percent up leg as a whole, but the give away is the atypically small retracements in price. Looking at the red down percentages in the above daily chart of silver you will find that bears weren’t in charge for significant profits.
Silver, Daily Chart: Aggressive Reloading
Silver in US Dollar, daily chart as of May 26th, 2020
On 5/22/2020 we took a long entry before a holiday weekend. Our first target was met on 5/26/2020. Risk was eliminated in this way and first profits secured.
It is this urgency of silver to catch up even on the smaller time frames, that leads us to take aggressive entries. Most think after a move from $11.639 to $17.629, a 51.46% move one is late to the party. Then again, being late is great. Once the bullet train is in motion there is no reason to be timid. You might not want to be size wise aggressive if this is your starting point with your first position in silver. You certainly don’t want to sit and wait and see prices for a long time run away from you though either. Our quad exit strategy allows for participation with smaller size and building over time a sizeable exposure to the silver market.
Being late is great
It seems that in the investment world it is best to be in early. Get data ahead of the crowd. Be prepared early. And all of this is true of course. And than again in this specific case betting on the less shiny option versus gold is a grand opportunity. History has shown that silver more often than not has outperformed gold in a bull market at a later time. Gold has already shown its strength and with the fiscal uncertainties fundamentally (excessive quantitative easing) a continuation is likely. This means silver might not just catch up to gold, but could easily be from a profit percentage perspective the more attractive investment vehicle. We highly recommend ownership of physical silver as well, for the long term investor.
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