Silver is up 24% in less than a month. And it’s going to go higher from here.
Silver is near a seven-year high price thanks to a massive surge in July.
Back at the beginning of July, I told you silver was going to break out. Since then, the price of an ounce of silver has risen from $18.01 to $22.36.
That’s a 24.2% gain in 22 days … that’s a breakout!
In that run, the silver price rose 7% on July 21 and 5% on July 22. Those are some of the biggest daily increases in silver since 2008.
Since 2008, there have been 3,271 trading days. The silver price rose just 36% of those days. The rest of the time, the price was either falling or moving sideways.
But if we look at the days it went up, we see a pattern.
The three of the four largest daily gains in the silver price happened in 2008. The fourth was in 2020:
- September 17, 2008: +14%.
- November 24, 2008: +9%.
- November 21, 2008: +8%.
- March 24, 2020: +8%.
The unsurprising thing about that list is that while 2008 has three days in the top four, 2020 already has one (two, if you look at the top five). And there are many more to come.
Here’s why.
Silver Isn’t Close to Its All Time High … Yet
As you can see from the chart below, the price of silver today is less than half of its peak in 2011:
The record was $48.44, set on April 28, 2011. The silver price must go up 117% to hit that former high.
That’s wildly different from gold. The gold price is within spitting distance of its peak 2011 price — 2% away!
That tells me silver has a long way to go in this bull market.
If we combine silver’s recent surge and gold’s near record price, it tells us something about this market. There is a flight to safety.
That is a response to the massive amounts of stimulus (aka money printing) by governments and central banks all over the world.
For example, on Tuesday July 21, the European Union agreed on an $860 million stimulus package. And in the U.S., the historic Coronavirus Aid, Relief and Economic Security (CARES) Act pumped $2.2 trillion into the economy. And we will likely get another giant stimulus bill shortly.
The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act is a $3 trillion stimulus package that passed the U.S. House of Representatives, but not the Senate. The ultimate stimulus will probably be somewhere between $1 trillion and $3 trillion.
This sent many experienced traders and money managers into safe havens. They’re concerned about inflation.
Primarily they’ve run to gold, but now silver. That’s because, as we discussed here many times, silver is a better value than gold.
Normally, it takes about 60 ounces of silver to buy gold. That ratio is 83 ounces today. That means silver is a steal compared to gold. And investors are gobbling up silver now.
If you own silver and silver miners, stay the course. If you haven’t bought yet, there’s still time. You can buy a simple silver fund, like the iShares Silver Trust (NYSE: SLV) and still possibly double your money as the silver price roars towards its highest level since 2011.
Good investing,
Matt Badiali
Editor, Real Wealth Strategist
