Silver Hits $42/oz — 45% YTD Gains —
Silver has been on a remarkable run this year, surging 33% and capturing the attention of investors worldwide. This precious metal is indispensable in modern technologies, driving growing industrial demand, and serves as a reliable hedge against currency devaluation.
Recently, our esteemed analyst Alan Hibbard appeared on Schwab TV to delve into the forces propelling silver’s rise. In short, demand is coming from everywhere, from retail investors to institutional investors alike. That’s why he expects silver to outperform gold by a factor of 2 to 1 in the short term.
We’ll dive into silver’s rise and more, but first, let’s catch up on the news.
Central Banks Continue Their Gold-Buying Spree
According to the World Gold Council, global central banks have added around 2,200 tons of the metal since the third quarter of 2022. China’s central bank has notably increased their gold reserves for 18 straight months, boosting its gold reserves by 16%, or 10 million troy ounces.
Copper Surges to New Highs – Future Demand Drivers
Copper prices reached a record high of $11,000, up 35% from the beginning of the year. The price of copper on the London Metal Exchange (LME) reached an all-time high of $11,104.50 per metric ton on Monday, due to a rally driven by short covering and speculative bets. Copper is used in a host of applications like power, construction, and increasingly in green energy applications like electric vehicles and AI data centers, and global demand is expected to continue rising.
Recession Warning as 19 States Show Rising Unemployment
A recession could be imminent, according to Nancy Lazar, Piper Sandler’s chief global economist. Lazar noted that 19 US states had recorded at least a 0.5 percentage point increase in their average unemployment, which has been a nationwide recession indicator in the past.
This Week in History: The Securities Act of 1933
On May 27, 1933, the United States passed the Securities Act of 1933, a cornerstone of financial reform during the Great Depression. This landmark legislation aimed to restore public confidence in the financial markets after the 1929 stock market crash and ensuing economic turmoil.
The Act required issuers of securities to provide truthful and complete information about their offerings, enabling investors to make informed decisions. The requirement for detailed financial disclosures helped establish a culture of transparency and accountability in the financial markets. By ensuring that investors had access to accurate information, the Act helped rebuild trust in the stock market, which was crucial for economic recovery.
The fire assay method is a traditional and highly accurate technique used to determine the purity and content of gold and silver, developed in 1,350 B.C. Which ancient culture developed the fire assay method?
A. Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Scroll to the bottom of this email for the answer…
What is Causing the Silver Surge?
Silver is having an impressive year, up approximately 33% year to date, drawing significant attention from investors.
We all know that silver has incredible historical significance. It has been a trusted medium of exchange for nearly 5,000 years, providing a stable store of value across civilizations. But that’s not the only reason to add silver to your investment portfolio:
- Industrial Demand: Silver is second only to oil as the most widely used commodity, with over 10,000 uses due to its unique characteristics like its high conductivity and reflectivity. The growing adoption of green technologies like electric vehicles, solar panels, and electronics is expected to significantly increase the demand for silver. For example, each electric vehicle uses up to 50 grams of silver, and solar panels use about 20 grams per unit.
- Protection Against Inflation: As a physical asset, silver cannot be hacked, erased, or inflated away, making it a reliable hedge against currency devaluation. During times of prolonged inflation, such as the 1970s, silver’s value skyrocketed, increasing nearly 35-fold from $1.40 per ounce in 1971 to an intraday high of over $50 per ounce in 1980. Silver also has a low correlation to other asset classes, making it valuable in a broader multi-asset portfolio.
- Accessibility: With a lower price point than other precious metals like gold, silver offers an affordable entry point for first-time precious metals investors. One ounce of silver is far less expensive than one ounce of gold, and for investors with limited funds, that can make a difference.
Our friends over at Sprott have compiled a brochure featuring these impressive statistics and more, exploring the many reasons to own silver.
Alan Hibbard Joins the Schwab Network
In a recent appearance on Schwab TV, Alan Hibbard shared valuable insights into the recent upward movements of gold and silver prices.
“We’ve seen central bank gold buying increasing since 2016… Retail demand is really high. We’ve seen Costco and Walmart selling gold and that’s atypical, and investors are absolutely flooding into those markets. Demand is coming from absolutely everywhere, from the retail investor to central banks, and everywhere in between.” Hibbard explained.
In under seven minutes, Alan discusses why the economy may not be as robust as central bankers suggest and why precious metals are positioned for further gains. He also explains why he expects silver to outperform gold by a factor of 2 to 1 in the short term. Alan believes it’s entirely feasible that we could see silver prices reach $50 sooner than we think.
To hear Alan’s reasoning why, watch the full interview here.
And if you want to add to your silver portfolio, it’s easier than ever. Simply click the link below.
That will wrap up another weekly issue of GoldSilver Nuggets. We’ll be back with more news and updates next week!
Best,
Brandon S.
GoldSilver
The fire assay method is a traditional and highly accurate technique used to determine the purity and content of gold and silver, developed back in 1,350 B.C. Which ancient culture developed the fire assay method?
A. Egyptians
B. Babylonians
C. Phoenicians
D. Sumerians
Answer – B. Babylonians
The Babylonians began using the fire assay method to test the purity of gold around 1350 BCE. In this ancient technique, a small sample is mixed with fluxes (such as lead oxide, sodium carbonate, and borax) and placed in a crucible. The mixture is then heated in a furnace at high temperatures (approximately 1100-1200°C). The fluxes facilitate the melting of the sample and bind with impurities, allowing for the separation of pure metal. This method has been fundamental in assessing the quality and value of gold throughout history.
