*Everyone's going to get poorer except for the people that own physical gold and silver
*This is correct time to buy silver at $22.30
We're getting closer to the explosion of gold/silver prices to the upside. I'm a big believer that inflation is not going away. It's going to continue to be a problem. We could be looking at a black swan event in inflation. It could be an oil shock, natural gas shock or agricultural shock, said Kushal Thakar an Indian specunomist. This will be a "decade of shortage" defined by high inflation and a failed attempt to raise rates, the perfect combo to trigger a massive rally in gold.
Inflation accelerated from under 3% to over 6%. At some point in 2022, we could approach 9%, he noted. By 2028, gold could be over $5,000. If gold is over $5,000 and we go back to the 20:1 gold-silver ratio. That's $250 silver, he said. It will be the decade of shortages, and everyone's going to get poorer except for the people that own physical gold and silver. Silver is another quintessential inflationary metal to buy and hold during the next decade.
Meanwhile, iShares Silver Trust is testing the support level at $21.80. I'm convinced that in this bull market, there's going to be another corner attempted at the silver market. This is correct time to buy silver at $22.30. That move edged the Gold/Silver Ratio back below 79 after the relative measure of the 2 precious metals' prices touched 80 the highest since 12 September.
It hit a new all-time high above 114.46 on 20 March 2020 when the Covid Crisis saw gold investing jump at $1598 but crushed the silver price at $13.96, The ratio of gold to silver prices then leapt to new all-time records above 100, beating its Great Depression highs of the 1930s and early World War 2.
Federal Reserve Chair Jerome Powell already shocked the markets this week by dropping the phrase that "inflation is transitory" and stating that the US central bank will be discussing accelerating the pace of tapering at the upcoming December meeting. There are too many similarities between now and the late 1960s and early 1970s, and they cannot be ignored. Back then, inflation was going up about 5%-6% per year, the same as now. And then, in 1973, there was the black swan event, the oil embargo.
Silver prices continued to trend lower. The dollar moved higher after declining on Friday, but Treasury Yields continued to move more down. Concern over the new covid variant has taken its toll on sentiment. Contracts for US new home sales jumped 7.5% in October, silver prices remained on the defensive. The markets will now wait to see if the current vaccines are effective against the new variant before the next move in the markets are forged.
The silver bulls are to push prices above longer-term chart resistance at this year’s 6 June high of $29.93. A move above this year’s high would open the door to much bigger upside price potential.
(Disclaimer: This analysis is only for educational purpose and is not and must not be construed as investment advice. It is analysis based purely on economic theory and empirical evidence. Readers are requested to kindly consider their own view first, before taking any position.) Date: 3-12-2021