Seeking Alpha: Explosive Silver Prices Will Be Mind Boggling

Article by Bob Kirtley in Seeking Alpha

Gold has been ignored for 6 years and silver has been totally forgotten about by the majority of the investment community. This was evident when the gold/silver ratio rose to almost record levels at 95 which was reached in July 2019. The situation has started to change over the last few months as we have seen both gold and silver prices spring to life and increase in value. In particular, silver has been moving faster than gold as the gold/silver ratio shows that it now stands at a reduced level of 83.

The Silver Chart

This chart depicts the sudden rise in silver prices from around $14.50/oz to a high of $19.50/Oz in just 4 months. We can also glean that during that period of rapid movement, silver formed a number of higher lows which is usually a positive indication of a strong advance.

Gold/Silver Ratio chart

This chart shows that the gold/silver ratio rose to 95 when silver was out of favor and has subsequently reversed as silver prices gained some traction. Over the last 20 years, the average has been around 60 for this ratio so there is still room for silver to move to higher ground before it hits that average. There are some who are calling for the ratio to drop to around the 15 level.

These predictions generate vastly different prices for silver as per the following:

Gold at $1,500/Oz, the ratio at 83, Silver priced at $18.00/Oz. Gold at $1,500/Oz, the ratio at 60, Silver priced at $25.00/Oz. Gold at $1,500/Oz, the ratio at 15, Silver priced at $100.00/Oz.

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