Story Highlights
- Matt Badiali’s silver trade is up 56% in just over two months!
- Silver’s rally will only continue from here — and there are two ways to profit.
- The price has pulled back temporarily, so now is your time to get in.
If you made the silver trade I recommended in July, congratulations — you made 56% in just over two months.
If you took the more conservative route I also suggested, you’re up 20%.
And if you didn’t make either trade, that’s OK. Silver is going to climb much higher, and you can still be part of that rally.
30-Year Extreme Silver-to-Gold Ratio
As I told you on July 1, the silver-to-gold ratio hit a 30-year extreme. That told me that history is ready to repeat itself.
Readers who bought the VelocityShares 3x Long Silver exchange-traded note (Nasdaq: USLV), or the more conservative iShares Silver Trust exchange-traded fund (NYSE: SLV), caught the move in silver exactly right and have made double-digit gains so far.
And as I told you then, this is the kind of setup that makes those funds profitable.
You can see what I mean in the chart below:
As you can see, silver has risen steadily since I wrote about it back in July.
While this was a great run, it’s still early for silver. Remember, silver tracks gold. And the price of gold keeps moving higher.
That keeps the silver-to-gold ratio up around extreme highs. We expect the silver price to skyrocket to bring that ratio back to its average. That’s our cue to buy more silver.
Silver’s Price Pulled Back — It’s Time to Buy
In that July article, I said:
Investors are fleeing to gold as a “safe haven.” It’s a place to stash their cash to avoid losses. The economic forces are pushing smart money in that direction.
European banks have negative interest rates. In other words, banks are charging people to keep their cash.
And in the U.S., the Federal Reserve told the world it would cut interest rates. That means investors can’t count on U.S. bonds to pay them much, either.
That’s why investors around the world are piling into gold. And it’s why the gold-to-silver ratio hit a new extreme.
It’s also why I don’t expect the gold price to fall.
Silver is a store of value in its own right. And soon, bargain hunting will send the silver price up to match the gold price.
That thesis hasn’t changed one bit in the last couple of months.
Silver needs to climb much more to get back in equilibrium with the price of gold. That will happen because the market will eventually recognize that silver is undervalued.
When that happens, the silver price will outperform the gold price, and we can capitalize on it.
If you are long silver, stay the course. If you haven’t bought yet, that’s OK — do it now.
Silver prices have eased lower lately. Take that as a buying opportunity.
Good investing,
Matt Badiali
Editor, Real Wealth Strategist
P.S. We own two outstanding silver miners in our Real Wealth Strategist portfolio. To get access to those and more, just click here.