Daily Wealth: Why Silver Has Never Been a Better Deal Than It Is Today

May 26, 2020

Article by Chris Igou in Daily Wealth

The record stood for 29 years...

In 1991, silver was dirt-cheap relative to gold. Prices for both metals had fallen over the previous year. But silver's fall was much more dramatic.

As a result, gold became extremely expensive compared with its kooky cousin. That value gap peaked on January 29, 1991...

The gold-to-silver ratio hit its highest level ever. And that record stood... until 2020 came along.

Now, that three-decade record has been broken. Gold is more expensive relative to silver than at any time in the past 40-plus years – going back to when gold first started trading freely in the early '70s.

Importantly, this value gap won't last forever. And silver is likely to outperform gold in the coming months as a result.

Silver prices are down 3% this year, while gold prices are up 14%. And in recent weeks, we've seen the widest value gap between the metals of all time.

Simply put, silver has never been a better deal, relative to gold, than it is today. The ratio of the two metals broke out to all-time highs in April.

The first similar instance was when the gold-to-silver ratio peaked in January 1991. For the next five-plus months, silver outperformed gold...

While gold was slightly down from the end of January through June, silver was up 18%. That's an impressive move. But the upside potential can get even better...

We saw another example in May 2003. Gold was again getting expensive compared with silver. And if you had bought silver then, you would have crushed gold investors...

Sure, gold went on to rally 15% from May 2003 into April 2004. But silver rallied 81% over the same period... It was no-contest outperformance.

The last time we saw gold's value tower over silver's was in November 2008. And you guessed it... Once again, buying silver when the gold-to-silver ratio was high was the right call.

To read this article in Daily Wealth in its entirety and view the relating charts, click here.

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