Silver, the “Devil’s” Metal Shining Brightly

Silver, the “Devil’s” Metal Shining Brightly

Silver, the “Devil’s” Metal Shining Brightly

$SLV, $GLD

Silver and Gold are both money and a commodity, and during times of market uncertainty, like we have been seeing since the beginning of this year risk off investors first rush to Gold as a hedge against the value of their fiat (paper) currency. And also since Gold is also a commodity, a surge can drive the fundamental relationship between Gold and other commodities out of “harmony” for a time.

In those times it is easy to overlook other Key precious metals like Silver.

And again, while Silver, like Gold, is both money and a commodity, it is also an in-demand industrial metal with a very wide range of commercial uses.

There’s a large Silver trade in China, the home of much of the world’s electronics manufacturing, as Silver is essential to the electronics industry. Virtually every circuit board, cell phone, computer, and even flat screen TV depends on a steady supply of The Devil’s Metal. It’s also Key to solar panel and air conditioning industries.

Silver has a large market in the jewelry and housewares industries.

But what many people do not know is its role in medicine, and it has been used since the 13th Century in medicine.

Silver’s powerful antibacterial and antimicrobial properties mean it has an ever-expanding variety of uses in creams, surgical instruments, clothing and medical devices.

As more bugs and viruses become resistant to traditional antibiotics, Silver’s ability to create a sterile environment will become increasingly crucial.

When the global economy slows, creating a slowdown in retail sales of consumer products, Silver prices often react with more volatility than Gold on a percentage basis.

As in the worldwide equities dive that followed Brexit, Silver shot above $21 oz its highest since Y 2014.

That was because investors were moving to Silver for its safe haven qualities, treating it like a more secure version of paper money, not as an industrial metal.

This rise in demand, and price, was a clear sign investors were/are looking for the most sizeable safe haven out there, particularly with the fate of both GBP and the EUR in question.

Despite its occasional price volatility, Silver’s tracked along consistently with the price of Gold. Silver’s volatility can complement Gold, offering growth potential that held up by Gold’s stability and long-term protection of buying power.

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Today, Silver is trading at the low end of its usual ratio to Gold and 60% below its Y 2011 high of $49 oz, signaling a shiny future long term.

As the Gold-Silver ratio (65.647) keeps declining, Silver (20.3690) is showing much more strength than Gold as it actually enjoys a gain of 0.5% though the range of 19.50-21.00 may not be breached anytime soon.

The future looks very promising for industrial demand too.

As much as 10% of industrial Silver demand now comes from solar panels manufacturing. With the worldwide need for solar energy going up, spot Silver shortages may lead to higher than normal price moves.

Overall, Silver’s outlook is good, as we cannot imagine a future that does not include a continuing demand for smartphones, computers, tablets, and other consumer electronics the the gadget inventors have not yet thought of.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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