Silver Hits 12-Year Highs But Is Still Cheap

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Silver, despite recent highs, remains undervalued compared to historical peaks, offering significant upside potential due to its volatility and industrial demand.The BRICS summit and potential de-...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSilver Hits 12-Year Highs But Is Still Cheap\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-24 12:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4728865-silver-hits-12-year-highs-still-cheap><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Silver, despite recent highs, remains undervalued compared to historical peaks, offering significant upside potential due to its volatility and industrial demand.The BRICS summit and potential de-...</p>\n\n<a href=\"https://seekingalpha.com/article/4728865-silver-hits-12-year-highs-still-cheap\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4585","symbol_name":"ETF&股票定投概念","start_time":0,"source_url":"https://seekingalpha.com/article/4728865-silver-hits-12-year-highs-still-cheap","article_id":"2477523568","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/157396954/image_157396954.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2477523568","pubTimestamp":1729742914,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Silver, despite recent highs, remains undervalued compared to historical peaks, offering significant upside potential due to its volatility and industrial demand.The BRICS summit and potential de-doll","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","SIVR":"Aberdeen Standard Physical Silver Shares ETF","BK4588":"碎股","SLV":"白银ETF(iShares)","BK4547":"WSB热门概念","PSLV":"Sprott Physical Silver Trust"},"translate_title":"白银触及12年高点但仍便宜","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PSLV":0.9,"SIVR":0.9,"SLV":0.9},"content_text":"Silver, despite recent highs, remains undervalued compared to historical peaks, offering significant upside potential due to its volatility and industrial demand.The BRICS summit and potential de-dollarization are driving both gold and silver prices up, with silver benefiting from reduced USD demand.Investing in silver can be done through physical metals, individual stocks, or ETFs like iShares Silver Trust, which tracks silver prices closely.Risks include potential higher interest rates and economic slowdowns, but the strong current trend suggests silver's rally is not over.   mbbirdy Silver has recently hit multi-year highs. But it is still very cheap compared to the 2011 and 1980 highs. Despite gold’s and silver’s remarkable rallies, these still remain worth considering. Gold has recently touched a high of $1750. But silver seems to have greater upside potential than gold due to its undervaluation and the gray metal’s volatility. As I am writing this, silver is trading at a price of $34, but more is yet to come, it seems. My previous article on silver As mentioned in my previous analysis of silver, the gray shiny metal is often overlooked versus gold. Still, silver has greater potential due to its volatility and growth during crises and periods of excessive money printing. I also wrote about silver’s underperformance relative to gold and the fact that silver was a great investment opportunity. I also praised silver as a unique asset at a time of uncertainty.  I am now updating my previous analysis because silver has substantially appreciated since the publication of the article “Silver, The Small And Unloved Brother Of Gold, Is A Growth Star”. Moreover, I would like to briefly discuss the ways to profit from the gray metal’s brilliant performance because I still think silver prices have further room to rise.  Why should silver prices rise further? Below there is a graph showing silver’s price gains since 1975. As of the time of writing, silver is trading at a price of around $34 per ounce. Below is a diagram unadjusted for inflation. We all understand that $50 in 2011 is worth more than $50 today. The $35 high reached in 1970-1980 is also much higher than the $34 now.   silverprice.org But if we just extend the trend line on the graph, we will see that there are further gains to be made.  silverprice.org It seems to me that if we just extend the graph, in about 10 years, silver could cost as much as $60. But this is just a trend analysis. I will not go into many details on the next price target for silver, though. Instead, I will talk to you about the current fundamental factors driving the gray metal’s prices.  As I have mentioned many times before, the demand for silver is due to industrial uses and also investors choosing the metal as an alternative to gold. That is why when the interest rates and the dollar’s value decrease, the prices of both gold and silver rise. Silver is used in manufacturing solar batteries, semiconductor production, the making of touchscreens, and batteries used in electronics. A while ago, I wrote an article titled “Silver may surge to $100 thanks to AI”. In this article, I explained how artificial intelligence technologies could push the demand for silver upwards. But it is not because of AI or any other industrial uses that the silver prices are surging right now, it seems.  As I have mentioned before, gold has been rising in value as well. So, both metals are rising. In my view, this is due to the BRICS (Brazil, Russia, India, China, and South Africa) summit that is now being held in Russia. Many analysts accept the possibility that BRICS nations could establish a currency backed by gold to rival the US dollar. Due to the BRICS alliance's expansion, there are discussions that the dollar’s importance will decrease. As an alternative to the USD, the countries could establish a currency, possibly a digital one, backed by gold as a secure, inflation-resistant asset, which has always played a crucial role in the world’s financial history. BRICS nations’ central banks are increasing their gold reserves, thus raising gold prices amid a potential de-dollarization shift. You might be wondering why silver is appreciating as well. After all, no one wants to have a currency backed by silver. Well, to start with, if an alternative to the USD as a medium of exchange gets established, the demand for the US dollar will decrease. Therefore, the prices of precious metals nominated in US dollars should rise simply due to the dollar’s depreciation. Meanwhile, silver is often seen as a safe-haven asset and a hedge against inflation, which could hedge or even replace the US dollar when the credibility of the USD is compromised.  Some market experts, including David Morgan, publisher of The Morgan Report and creator of Silver-Investor.com, say that silver is more convenient than gold as a medium of exchange and a store of value. Silver is much cheaper than gold, which makes it more convenient to transport and use. According to Mr. Morgan, “In an absolute crisis, silver would be the monetary metal of choice. Its value per unit is a lot less than gold”. The gray metal has been a synonym of money throughout history. In other words, silver has traditionally been used as money, more often than gold ever has. Silver’s undervaluation There is quite a popular way to judge if silver is overvalued or not. There is the gold-to-silver ratio. The graph below shows that the ratio is off its highs reached between 2020 and 2021. However, it is still very high, lingering around the 80 mark, over and above the 50-60 average level. Gold-to-silver ratio GoldSilver.com Dow-to-silver ratio Macrotrends.com The Dow-to-silver ratio is close to its all-time highs. The only time when the stock market was so expensive relative to the undervalued silver was in the 1990s -2000s during the so-called “Dot.com bubble”. At the time, high-tech companies were highly overvalued, which kept the stock indices elevated. Silver, meanwhile, only traded for a price between $4 and $6 during the period. Silver price history Macrotrends.com After the lows, reached in the 1990s-2000s, silver prices started surging. In 2011, the commodity prices touched a multi-year high of $48.60.  Ways to profit from silver’s growth There are various ways to profit from silver’s growth. As I have written in my previous articles before, my recommended way of investing is buying the physical metal itself, either in the form of bars or coins. However, there are also drawbacks to investing that way. The most obvious one is the high storage costs. It is also possible to buy individual companies’ shares. At the same time, getting every single company’s accounting and other fundamentals right requires some substantial knowledge and experience. Those investors willing to take advantage of silver’s strong growth but unwilling to risk choosing individual companies or paying for the physical metals’ storage can still invest in ETFs.  The largest and most popular silver ETF in the US is iShares Silver Trust (NYSEARCA:SLV). From all the silver ETFs, it has the largest amount of assets under management. Its shares’ trading volumes are also the highest. The management fee is only 0.50% per year, which is quite moderate.   iShares.com But the ETF’s most important advantage is the fact its shares move in direct correlation with silver prices, as can be seen from the graph below. iShares.com Holding a share in SLV ETF is not free, but its management costs might be lower than storing physical metal. Risks to the bullish case on silver The risks to my bullish position on silver are obvious. The first and foremost one is that of higher rates for longer. If the US unemployment rate does not rise by much, the inflation rate will rise or at least stay unchanged, then there is a risk the Fed may be too slow on their rate cuts. This will be bearish for precious metals in the short-to-medium term. However, the Fed may provoke a recession and eventually be forced to increase the money-printing rate.  The economic slowdown may also be a piece of bad news for industrial demand for silver but good news for investment demand for the gray metal. Finally, there is a risk that silver’s fundamentals may simply be ignored by the general public. A substantial share of investors prefer to buy high-growth assets such as high-tech companies’ stocks. This may mean the demand for silver as an investment class may be limited. However, this does not seem to be the case right now. As I have mentioned at the beginning of this article, the trend looks very strong for silver. Conclusion  Despite its remarkable growth, silver is still not as expensive as it could be. I am personally strongly against buying assets at their multi-year highs. But it still seems to me that the gray metal’s rally is far from over. Even though I am in favor of buying physical metals, buying SLV ETF is also a fair alternative for investors willing to take advantage of the gray metal’s miraculous rally.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2477523568"}