Silver Buying Signal July 2022 - Why Silver's Drop Could Be a Golden Opportunity
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Could we be overlooking a golden opportunity in silver right now?
Like gold, silver has struggled recently amid rising interest rates and a stronger dollar.
But there are other factors at play pointing to the possibility that silver could strengthen significantly in the near future.
Before we get started:
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Breaking News - Gold to Silver Ratio Breaks 90
The gold to silver ratio recently crossed back above 90.
For those unfamiliar with the gold to silver ratio, it measures how many ounces of silver are required to buy one ounce of gold.
A high gold to silver ratio means that it takes considerably more ounces of silver to purchase one ounce of gold.
This condition suggests the possibility that silver is undervalued, effectively selling at a discount.
For perspective, the average level of the gold to silver ratio over the past few decades has been between 55 and 60.
So how unusual is it for the ratio to be above 90? In the last 50 years, the gold to silver ratio has been 90 or above for no more than roughly 18 months total.
The last time the gold to silver ratio broke above 90 was in February 2020. From there, the metric kept marching up until it reached a high of 124 the following month.
From that level, the ratio began dropping steadily until it reached 63 in February 2021. That decline in the gold to silver ratio coincided with a 60% increase in the price of silver over the same period.
Evidence of A Recession Continues to Mount
There's more potentially good news for silver, other than the gold to silver ratio being unusually high. Evidence continues to mount that we are on the verge of a recession.
Speculation is growing that the Federal Reserve could be forced to abandon its rate tightening regime and go back to cutting interest rates.
This could put a shine on silver that in recent years has shown a tendency to thrive in easy money policy.
When the health crisis ushered in the return of quantitative easing in early 2020 It helped propel gold upward by 25% for the calendar year, and silver?
Silver surged 48% in 2020.
If you're surprised to hear that easy money policy might return, don't be...
A recent Bloomberg article says:
"Signs of a rapidly deteriorating US economic outlook have spurred bond traders to pencil in a complete policy turnaround by the Federal Reserve in the coming year with interest rate cuts in the middle of 2023."
In fact, some observers say to look for a complete reversal in Fed policy this year.
The founder of Destination Wealth Management recently told CNBC that he thinks:
"The Federal Reserve is going to bring out these multiple very, very strong signals that they're looking to control inflation. It is going to dip the economy into a slow growth, stagflation or a recessionary environment. And then I think the Fed is going to start cutting rates again later on this year."
Experts agree silver and gold are hindered at the moment by rising interest rates.
This could fool some people into missing the golden opportunity in silver.
When you do a deeper dive into all the analytics supporting silver, you'll see there is an exciting opportunity in investing in silver right now.
Considering the past example in 2020, silver may be primed for a rise at the sign on interest rate cuts.
If you are interested in preparing for a purchase of silver, there are several ways to own silver directly, including coins that are priced based on the weight of the metal alone and actual silver bars.
You can store physical silver at your house, or if you are purchasing through your IRA (Individual Retirement Fund) you'll need a custodian to store the silver for you as it's illegal to store precious metals purchased through an IRA at your home address.
The type of investment you choose is entirely up to you. One of the best ways we have found to invest in silver is through Silver IRA Accounts.
Silver IRA Accounts let you purchase physical silver using your retirement savings from you 401k or current IRA.
You will need to speak to a Gold and Silver IRA company to get started with these types of accounts.
The best Gold and Silver IRA company we have come across is shown below. Visit their website here or call them directly on 877-565-3712.
You can also get their FREE Silver IRA Investment Packet here.
It is this reason that Augusta finds itself as the best gold IRA company due to it's transparent pricing and outstanding customer service.