TSI editor’s note: While sometimes silver gets left behind in favor of gold in the media, Alasdair Macleod of GoldMoney, recently reminded the financial press and the public that the silver story is compelling, if not frequently told. In his article, which originally appeared on the GoldMoney website back in June, Macleod details supply and demand, the Gold to Silver Ratio, and COMEX anomalies as primary factors for the investment appeal of silver.
“Having been left behind while monetary events have been focusing on the gold price, silver is now beginning to catch up. The spike to a gold/silver ratio of 125 appears to have marked a major turning point in the relationship, and silver can therefore be expected to continue to outperform gold as the fiat money situation deteriorates. Traders at the bullion banks appear to be avoiding short positions in silver futures, in which case a rising price will see them withdrawing liquidity instead of supplying additional contracts to the buyers.
The global economic and monetary situation is dire, due to both the coronavirus and because the credit cycle was already turning down in late-2019. The amount of monetary debasement deployed by central banks in an attempt to save their economies promises to be unprecedented to the point where total monetary destruction will be an increasingly likely outcome.
That being the case, the attraction of silver over gold is to be found in a substantial fall of the gold/silver ratio, as it dawns on markets that the end of fiat money is nigh.”