The Sovereign Investor

About the Author The Sovereign Investor

Since 1998, The Sovereign Society has been at the vanguard of the pursuit for personal liberty and free markets. We enthusiastically support the enduring pursuit of freedom and prosperity, and, to that end, we believe in empowering individuals to make educated investment choices. Through the years, we have assembled a talented and deeply experienced team of analysts, editors and researchers who understand that the best investment and wealth-protection opportunities in any market are often hidden. And our approach has led to a great degree of success. Our independent, uncompromised research has predicted some of the biggest financial catastrophes in recent memory. We were one of the very first financial research firms to warn investors about the dangers in the derivatives market and the threat they posed to the global financial system. We also alerted our readers about the dollars crisis of 2004-2005, the meltdown in the private-equity markets in 2007, the collapse of Lehman Brothers in 2008, and we’ve been sounding the alarm bells about the European debt crisis since early 2010, long before the mainstream media started paying attention. In an age when our personal and economic freedoms are being curtailed like never before, our work has never been more important, and our voice never more indispensable. That’s why we remain steadfast in our mission of scouring the globe for investment opportunities that can only be unearthed by our exhaustive, “boots-on-the-ground” approach. With a daunting economic era ahead of us, our purpose is providing our subscribers with the unvarnished truth in an industry filled with artifice and obfuscation. We realize that a world of investment opportunity exists in stocks, commodities, currencies and asset protection that are often overlooked. Our mission is to bring them to you each day. Interested in joining? Sign up for The Sovereign Investor Daily Daily today! (It’s FREE!) Visit http://thesovereigninvestor.com/

iShares Silver Trust (ETF) (SLV): Good Odds for Big Gains

Today, I’m going to show you an incredible opportunity in the precious-metals market. It’s a trade where the odds are in your favor as I’ll show you. And it’s a trade that I’ve put my own money into.

If you buy 1 ounce of gold today, it’ll cost you 80 ounces of silver. In other words, gold is 80 times more valuable than silver. That’s happened only three times in the last 15 years. It’s extreme. And usually when the gold-to-silver ratio hits extreme levels, two things happen.

First, you see prices go up. Period. In 2008, when the ratio hit 80, silver soared. In 2002, silver rallied nearly 100%. In 1991, the metal gained over 40%.

Second, silver’s price climbs faster than gold prices.

Silver Versus Gold - A Golden Opportunity for Silver

Silver Is Too Low

What’s going on? Why does this keep happening?

Gold is a precious metal with mostly investment demand. Investment demand means people own it because they believe gold’s price is going to go up.

Silver has two sources of demand: investment demand because it’s a precious metal, and industrial demand. For example, it is used in solar energy, to make electronic circuits and as a catalyst in chemical reactions.

Approximately 56% of silver’s use goes to industrial demand. As a result, prices are sensitive to industrial demand. That’s why gold and silver don’t trade tightly with each other.

Another reason is that silver is rarely found on its own. As much as 66% of silver comes as a by-product of mining copper, lead and zinc. Silver supply goes up when companies are increasing mining of these metals. So, you have a situation where there is too much silver supply compared to demand. Because of that, silver prices go low, even when gold prices are rising.

Supply Won’t Keep Up

So, what’s going on now? Copper is near a six-year low. Zinc at a nine-year low. Lead at a five-year low. Because of these collapsing prices, mining companies have slashed production of these metals. Not surprisingly, silver production is set to plummet as well. Capital Economics, a well-respected research company, estimates that production is going to drop 9.2% in 2016 and 13% in 2017.

However, demand for silver is strong. Investment demand is up 400% from under 50 million ounces in 2006 to 200 million ounces in 2015. Investment demand is going to keep soaring because of negative interest rates and financial instability causing mistrust in paper currencies.

What’s more, industrial demand for silver is expected to rise 3% in 2016.

Shrinking supply. Rising demand. The gold-silver ratio is above 80 — a level where silver soars from past history. One, two, three. The stars are aligned for the metal to soar. How high? The price of silver could go to $30 per ounce at least, which is about 100% from its current price.

Good Odds for Big Gains

This is the kind of trade you should love to put on. The odds are in your favor. Of course, there are no sure things in investing, but I believe silver is a rock-solid bet to go up from its current price.

You can play silver by buying physical bars or coins. If you don’t have a local dealer who can help you, call Van Simmons at David Hall Rare Coins. Van is my go-to guy for coins and bullion, and he’s helped Jeff Opdyke when it comes to acquiring rare American coins from various times in U.S. history. For the record, I get no compensation from Van for referring you to him.

You can also own silver by buying the iShares Silver Trust (ETF) (NYSEARCA:SLV), an exchange-traded fund (ETF).

Finally, you can buy silver-focused mining companies trading in the stock market, which is how I’ve made my bet. Unfortunately, there are no ETFs that focus on silver-mining companies to recommend to you. And it would be imprudent to tell you to buy a stock without giving you all the facts and proper analysis. That’s the kind of thing you can look forward to when we launch my research service later on this year.