Silver Buying Opportunity

The gold/silver price ratio is currently 86x. Yet the mining ratio is 8.6x. What explains the difference? [The Daily Reckoning] November 29, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Silver Buying Opportunity Baltimore, Maryland [Adam Sharp] ADAM SHARP Dear Reader, In 2023, global silver production was approximately 26,000 metric tons. During the same period, gold production was around 3,000 metric tons. So 8.6x more silver is mined annually than gold. Yet gold trades at about 86x the price of silver today ($2,633/oz for gold and $30.60/oz for silver). What explains this disconnect? The primary differentiator is the fact that central banks buy and hold large quantities of gold. Global central banks and governments hold approximately 36,700 tons, or roughly 17% of all gold ever mined. It doesn’t really seem like that much – just 17%. But that percentage makes a world of difference in markets. Even single-digit moves in supply/demand can dramatically impact hard asset prices. When central banks hold nearly a fifth of global supply and are buying more, that matters greatly. Gold remains a monetary asset today, and I believe there’s a good chance we return to some version of the gold standard in the future. Silver, on the other hand, has lost its monetary mojo (for now). [(1) Message From Paradigm’s VP RE: Important Business Update]( [click here for more...]( We are alerting all Paradigm Press readers of a fundamental business change. Donald Trump’s landslide election win has required us to make a major move that could be critical for your wealth and your retirement. We recommend you take action now because the 60 days leading up to his inauguration could be critical for your accounts. [Click Here To Get This Important Update]( Yet historically, both gold and silver were money. Take a look at this infographic which shows the gold/silver ratio at various points in history. [image 1] Source: [Make Gold Great Again on X]( As you can see, the historical ratios were more proportional to the relative scarcity of these precious metals in the ground (roughly 1:8 today). For much of history, gold was used for large purchases such as real estate, and silver for everyday expenses. Even up until 1964 in the US, silver was an important part of our coinage. I believe that eventually, silver will also re-emerge as a personal monetary asset. Individual investors will catch on that we’re headed for a financial reset. They will want to put their money into something analog. A hard asset that can’t be hacked. But some people want something with more upside than gold, while still offering the safety of precious metals. Silver fits the bill beautifully. [Elon Musk’s Genius Plan to Save the US Dollar from Collapse?]( [click here for more...]( Elon is about to flip the switch on [his new money project…]( And it could trigger the biggest change to our financial system since the creation of the federal reserve in 1913. Could this save the US dollar from a complete collapse? [Click Here To See The Details]( Supply/Demand for Silver Today, demand for silver is once again booming, but not for monetary purposes (yet). As we can see in the latest Silver Institute [report]( physical investment demand for silver is currently dropping. Physical investment is forecast to fall by 15% to a four-year low of 208Moz in 2024. Losses have been concentrating in the US where coin and bar sales are on track for a 40% decline to its lowest level since 2019. This reflects an absence of new crises during 2024-to-date, which has affected precious metal retail investment across the board. Industrial demand, however, is still soaring, as we discussed in [Silver: So Much Bigger Than 2011](. In 2024 industrial buying is set to rise 7%, primarily driven by solar panel growth in China. ETF demand is also rising, reflecting growing investor interest in that area. It’s set to rise 8% vs 2023, the first inflow in years. This is a good sign. Overall silver is running record annual [deficits]( and this is expected to continue. When physical silver investment turns the corner, I expect fireworks. With industrial demand so high, it only takes a little growth from investment demand to send the metal much higher. A Crisis Catalyst When it comes to silver investment demand, the strongest catalyst is financial or monetary chaos. Things like: - Sustained inflation - Bank crisis - Sovereign default I am certain that the world won’t lack for crises as this decade proceeds. Governments around the globe have reached a tipping point of debt and deficit. Banks have massive [unrealized losses]( in their fixed-income portfolios, which everyone is essentially ignoring. Interest rates are rising despite Fed rate cuts, exacerbating the losses. The U.S. is about to dramatically change its foreign trade policies, which is certain to be a disruptive force. In the long run, tariffs will encourage domestic production and raise wages, but in the short term, there will be side effects. Silver performed remarkably well during the first inflation wave over the past few years. In 2020, silver bottomed out at around $11.60. Today it trades at $30.60, down from a recent high of nearly $35. The current correction offers a nice buying opportunity, but there’s a chance we go lower. If we do, I plan on buying aggressively. Good investing, Adam Sharp for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) P.S. Over the last five decades, Jim Rickards has developed a network that goes from the highest-ranking officials of the U.S. government… To the CIA and officials in the U.S. Department of Defense and the White House. Well, he recently got [this NEW INTEL about what could happen between now and Trump’s inauguration.]( I highly recommend you watch this now… Because this is coming from a Wall Street legend who managed billions… And this man, who we call “the Maverick”, believes this will have major implications for the stock market in the next 60 days. [Click here now because the next 60 days will be critical.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Brian Maher] [Adam Sharp]( has been a financial writer and Fed watcher since 2008. He is a contrarian who specializes in non-traditional assets. Adam founded and sold Early Investing, a newsletter about alternative investments. Sharp lives in Maryland with his wife, two children, and two dogs.. [Paradigm]( ☰ ⊗ [UPDATE PREFERENCES]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here,]( or manage your newsletter preferences [here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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