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I Rarely Pound the Table, but I Need to … Buy Silver Right Now

Article Highlights:
  • Now is the time to buy silver.
  • A key ratio hit an extreme. That’s a signal for silver’s 150% rally.
  • Matt Badiali tells you why investors need to add silver to their portfolios right now.
I Rarely Pound the Table, but I Need to … Buy Silver Right Now

You must own silver right now.

Don’t wait. Buy it now.

You might own the miners, but you MUST own the metal.

I don’t care if you scrounge up 1960s quarters, cruise antique shops for heirloom silver sets or just buy a silver bullion exchange-traded fund (ETF) … you have to own silver today.

Silver is in an uptrend. And this is just the beginning of a huge rally in the metal.

A key ratio hit its highest extreme since 1991.

And every time we’ve seen this signal since the 1990s, it ended with the price of silver up double to triple digits.

As you can see from the chart below, silver is in the early stages of a bull market:

The gold-to-silver ratio is the number of ounces of silver it takes to buy an ounce of gold. The average value since 1990 is about 68 ounces of silver to buy an ounce of gold. When the ratio is at 80 or higher, the ratio is at an extreme. That’s what we see today.

The current ratio is 89. It’s way out of whack.

If we go back and compare earlier peaks in the ratio, you’ll see why I’m so excited:

  Ratio High (Value) Change in Silver Price
1 February 22, 1991 (99) +60%
2 March 3, 1995 (85) +62%
3 May 30, 2003 (80) +203%
4 October 10, 2008 (85) +371%
5 February 26, 2016 (83) +38%
(Source: Bloomberg)

 

What we see is that the gold-to-silver ratio tends to peak above 80. When it does, we see it bottom about three years later. The average gain in the silver price is 147%.

I wrote about the gold-to-silver ratio back in July. I recommended that we buy either the iShares Silver Trust ETF (NYSE: SLV) or the leveraged VelocityShares 3x Long Silver exchange-traded note (Nasdaq: USLV).

The iShares Silver ETF is up 21%. And the VelocityShares 3x ETN is up 50%.

But this is just the beginning. This rally will catch fire in 2020.

When we look back on the silver trade in 2020, I expect it to be one of the biggest in history. We could easily see it return 200% or 300% from here, like it did from 2003 to 2006 and from 2008 to 2011.

That’s why we must own silver right now. It will be the best-performing metal in 2020.

Now I want to hear from you. Take my Twitter poll below! Which metal do you think will perform best this year?


Good investing,

Matt Badiali

Editor, Real Wealth Strategist

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