WHAT THE HELL IS WRONG WITH SILVER?The bull run in the precious metals complex which officially ended in Oct 2011 dragged the prices of the white metal to up to 50USD per ounce. That was a staggering 393% growth which took the prices from 10USD to 50USD however from there we have seen more than 70% correction in silver prices. The interesting part is even when gold is able to break it's 6 years long term resistance which stands at $1400, the Silver chart still looking dead and the gold-silver ratio is currently trading at 93 which is the highest in 30 years, so the question is what is really happening with silver?
1-We have already informed you that silver is known as a proxy for gold. Silver is known to be much more volatile than gold that's why it often is seen that when gold becomes expensive more and more investors tend to invest in silver in order to gain significant profit due to its high volatile nature however Recent report suggests that many investors are now looking towards alternative currencies such as bitcoin.
2-when you try to look at the 100-year historical chart of Gold vs silver prices you will be able to find two major bulls runs within the precious metal sector. The first one happened in 1971 which is known as a Nixon shock. The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, Nixon Shock is a phrase used to describe the aftereffect of a set of economic policies touted by former President Richard Nixon in 1971. Most notably, the policies eventually led to the collapse of the Bretton Woods system of fixed exchange rates that went into effect after World War II. From 1971 to 1973 The gold prices surged in a significant manner(36USD per ounce to 130USD per ounce) however silver underperformed gold within the years and rose only from 1.40USD per ounce to 2.01USD per ounce, It took almost 2 years for silver to outperform gold when new money flooded into the silver market. After that Silver prices rose from 1.40USD to 36USD which was an astonishing growth compared to the yellow metal.
Second major bull run occurred after housing market crisis on 2007, It took few years for silver to outperform gold as we have witnessed in 1971 however the only difference this time was that outperformance of silver was significantly higher compared to 1971.
Please note-We have not mentioned Jp morgan manipulation in the silver market as that would imply writing a book in itself
Ending this article with a quote-“History doesn’t repeat itself but it often rhymes,”
