Every week that passes, with low silver prices continuing, the more we continue to be bullish on silver. Many customers have been emailing and calling us, wondering “How long will silver prices stay low?” With no immediate sign of a huge silver price spike, we have been doing even more research than normal, looking at historical trends in the spot price of silver, and comparing commodity silver to other benchmark commodities. The entire focus of the May 2014 CBMint newsletter was advocating now being a great time to buy silver bullion.
Without rehashing too much of that material, please note that the gold/silver ratio, the ratio of the price of gold to the price of silver, is still very, very high — over 65. Silver and gold prices are intertwined and always have been. The relationship between the two is a useful tool for anticipating future silver and gold price movement. Historically, the GSR tends to narrow, often approaching 15, that is, gold is 15 times as expensive as silver. Clearly such a scenario would involve huge relative increases in the price of silver.
Many analysts are comparing the current low silver prices with the days when the price of silver per troy ounce was under $5. The similarities between the two historical periods run deep — recent sell-offs of gold assets, a high GSR, and recovering economy. Obviously, investors who were savvy enough to buy silver bullion in the $5 an-ounce days made tremendous gains. More and more, we are convinced that now is the time to concentrate on silver, and I, personally, have abandoned my balanced bullion portfolio to favor one that involves silver bullion products almost exclusively.