Silver rockets higher
Silver briefly above $117. Gold at $5,010.
Just a quick one, after a big day in the silver market.
The silver price opened on Monday at $104.73 an ounce.
During the day it briefly touched a high of $117.75, up 12.4%. A huge move.
It then dropped back to $106.50 at the time of writing, which is Monday evening in Buenos Aires.
I made a mental note of how silver shot through $100 an ounce on Friday. But today’s intraday move was truly huge.
Here is a summary of how gold, gold mining stocks, silver, and silver miners have performed over various periods up to the past two years. I’ve added silver miners this time, using the SIL ETF (see more comments about silver miners below).
Obviously, these have been huge moves. Precious metals are in a massive bull market. The bigger and faster the moves upwards, then the bigger the risk of subsequent sharp and fast moves downwards.
See earlier comments about silver from 17 October here, from 19 December here, and from 9 January here. Since I wrote about silver in October, the price has essentially doubled, from $53.32 to the present $106.50. That’s quite something in a little over three months.
Such markets in silver come around from time to time, but they are not frequent. They’ve only happened three times in the past half-century, with peaks in December 1979, April 2011, and whenever this one ends.
Silver price since 1975 (US$, log scale)
Source: Macrotrends
In broad terms, the gold and silver risk stack for investors is ordered like this, from lower risk to higher risk:
Gold
Gold royalty and streaming companies (paid readers can find out more here)
Gold miners (large producers are generally lower risk than junior explorers)
Silver
Silver miners
Precious metals bull markets tend to start with gold and move through the risk ranks as the bull matures. (Other metals like platinum and palladium also tend to perform well.)
We’re now at the point where gold miners have significantly outperformed gold, and silver has significantly outperformed the gold miners.
The gold-to-silver ratio (gold price divided by silver price) has now dropped to 47, from 80.7 when I wrote about silver in October. This means that silver has massively outperformed gold in-between.
But it’s interesting that the silver miners are still lagging silver, especially as the silver price has accelerated in recent months (see the performance table above).
Could the silver miners catch up and overtake silver in the coming days, weeks, or months?