Media
Silver Shines Brighter Than Gold
I had the opportunity to provide my thoughts on the attractions of investing in silver with renowned resources journalist, Angela East. My comments are as follows:
On a historical basis, when the ratio has topped 80, it has nominally indicated a time when silver was inexpensive relative to gold — in effect a “silver buying opportunity”.
“The result was that silver went on to rally 40%, 300%, and 400% the last three times this has occurred,” he explains.
“Conversely, the three times the ratio has fallen below 20 in the past, it has marked a period when gold was relatively inexpensive compared to silver. History therefore suggests that the current conditions represent a buying opportunity in silver.”
The biggest factor that can incentivise new silver production is a period of sustained higher prices.
“Typically, much of the world’s silver production has come from large, low-cost mines, or multi-commodity operations that produce silver as a by-product,” he explains.
“This is due to a background of price volatility in the silver space, which means only these companies can weather the storm.
“For those hopefuls wanting to develop a standalone silver mine, oftentimes their planned operation cannot withstand price volatility throughout the cycle — meaning there are periods when cost of production would well exceed the sale price received.
“This is why there is a dearth of standalone silver mines in Australia. Any planned silver development needs to be at the lower end of the cost curve.”
“There is a real lack of risk appetite in the precious metals space at the present time, despite the fact that is far and away the best-performing sector in terms of underlying commodity prices,”
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