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Silver Setting Up?

Investors arguing that this gold market is not yet exciting can still point to silver to make their case.

In a good gold market, silver outperforms. That is not yet how this market is developing: gold has been rising and silver lagging. As a result, just last week the gold:silver ratio hit its highest level in almost 30 years after a year-long run.

I don’t want to dive into the silver market in depth here, so I’ll keep it simple by saying that silver is both a precious and industrial metal. Those dual roles mean silver often performs better that gold in strong economies, when safe havens are not needed but industrial silver demand is strong. But silver also often slingshots past gold in strong gold markets as investors, perhaps after ‘missing out’ on gold’s initial gains, pile into the other precious metal.

We aren’t there yet. Gold is up but silver has struggled. In the last week, however, the price started to move and further drivers are now starting to develop. So far in July silver ETFs added 20 million oz., taking total holdings to a cyclical high near 550 million oz., and open future interest increased significantly.

If US$1365 per oz. was the price to watch for gold, US$16.20 per oz. is the price to watch for silver. If it gets above that, the next resistance is just above $17.

If you like silver, some reliable producer ideas are Pan American Silver (TSX: PAAS) and Fortuna Silver (TSX: FVI). Both are up in the last two days but if these silver signals are correct then there is more to come. MAG Silver (TSX: MAG), in the Maven portfolio, is also up in the last two days because of silver momentum.

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Newsletter

In her letter, Resource Maven explains what she is buying and selling, and why. Maven has bought into several of the markets best - performing stocks well ahead of the curve. She regularly identifies exciting new exploration opportunities and manages the inherent risk by selling some into speculative gains. And the mine builder and operator stocks that form the basis of the portfolio give strong, ongoing leverage to the rising prices of gold and silver. She has your precious metal bases covered.

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What distinguishes you from the rest is candor and honesty. You have a genuine concern for your subscribers that exceeds the other publishers I know. IMO that's more important than geological knowledge or even performance.

-BJ (Nov 2019)

Great letter this morning Gwen. I am not "all aboard" with your picks but your understanding of how best to manage a high risk portfolio is second to none. And I did buy a lot of G when you made the call and sold it about a month later for a very healthy gain. Thank you very much!
As for "shiny ponies" that are moving on anticipation and will move big on good news, you need to get on the BAY train. Just sayin’..........
Cheers

-PL (June 7, 2018)