Silver Shines!
Are You Ready for the Silver Shortage?
In conditions of inflation and war very much like we have experienced that last few years, silver roared to a record high of $50 an ounce in January 1980.
The US dollar has been substantially cheapened by money printing, whether actual paper or digital dollars, since then. That is why it costs so much more today to buy the same products. The nickel candy bar has long since disappeared. So much has the purchasing power of the dollar been diluted that $50 in 1980 is the equivalent of $144 dollars today. In other words, in today’s cheaper dollars, or as we say in constant dollars, silver would have reached $144 an ounce forty-four years ago.
So with silver trading in the low $30 range, it represent a real bargain. In fact silver traded at about $50 an ounce again in 2011 and 2012. So by many points of historical comparison silver is trading at bargain prices.
All this is a prelude to describing the opportunities we see in silver today. Here are a few impactful developments.
A recent Citibank research note titled Commodities Flows reflects a clearly bullish silver environment, with a year-end target of $35 which we are already rapidly nearing, while expecting silver to reach $38-$40 by mid-2025. They cite the Chinese energy demand for solar and EVs, in addition to a more recent jump in retail demand, as a store of value in response to weak property markets, consumer sentiment, and record-high gold prices.
Russia and China are both credibly reported setting their sights on the acquisition of silver. According to a recent piece in the Jerusalem Post, “… Russia’s Draft Federal Budget outlines plans to significantly bolster its holdings in precious metals over the coming years. Notably, the budget includes plans to acquire gold, platinum, palladium, and, for the first time, silver.”
“The inclusion of silver in the State Fund’s acquisition strategy marks a departure from recent trends. While central banks around the globe, particularly Russia, have set records in gold purchases following international sanctions, silver has largely remained off their radar. This latest development suggests that silver’s role in Russia’s financial strategy may be evolving.”
As we reported in September (China’s Silver Takeover), China has also been adding to its silver reserves. Higher volumes in silver trading and premium prices being paid in Asian markets are evidence of a new focus on silver, and what has been called a strategic effort to drain away the West’s resources.
We may have saved the most important point for last. A new report by Metals Focus, a London-based independent precious metals research firm (a synopsis here), points out that between surging demand in our digital and solar era, and dwindling mine production, only existing above ground silver stock will be able to fill the gap between supply and demand. That is a classic recipe for surging prices.
Are you ready for the silver shortage? Consider this an invitation to speak with a Republic Monetary Exchange precious metals professional to position yourself for the future of silver.