the price of gold has rallied to all-time highs
and investors in the yellow stuff have made some serious gains now everyone is wondering where
investors will move these gains into next the most obvious catch-up trade is silver that’s
because silver has historically followed gold and silver’s chart suggests its price is about
to go parabolic that’s why today we’ll be doing a deep dive into silver and telling you where
its price could be headed next my name is Guy stay tuned before we dive in you need to know that
nothing in this video is financial or investment advice this is purely educational content intended
to help you understand the silver market now at the time of shooting this video gold is trading
above the key psychological resistance level of $3,000 this is great news for gold investors but
it’s even better news for silver investors that’s because a gold rally has historically been
followed by an even bigger rally in silver although silver has also been rallying recently
it still seems to be undervalued relative to gold in other words it looks like silver still
has a lot more room to rally compared with gold this is something that can be clearly seen with
something called the gold to silver ratio the gold to silver ratio analyzes how many ounces of silver
you can buy for 1 ounce of gold investors keep an eye on this to determine whether gold is under
or overvalued relative to silver and whether it may be a good idea to rotate out of gold and into
silver when the ratio is elevated this indicates that gold is expensive relative to silver making
silver more attractive as an investment the uh golden rule yes pun intended that many investors
use is the 8050 rule if the gold to silver ratio is above 80 to1 meaning you can buy 80 ounces of
silver for 1 oz of gold then silver is undervalued and it’s time to switch to silver conversely if
the ratio is below 50 to1 silver is overvalued and it’s time to switch to gold typically a high
gold to silver ratio isn’t sustainable for long and silver eventually catches up to narrow the gap
at the time of shooting the gold to silver ratio is sitting at around 89:1 and has been steadily
rising for some time this suggests that silver is extremely undervalued relative to gold and that
it could rally significantly in the near future in fact silver could experience gains that are
even bigger than golds in percentage terms and that is because of its market cap for context
it’s the market cap of an asset that ultimately determines how much it can pump the smaller the
market cap the easier it is to move the price to put things into perspective gold has a market
cap of around $20 trillion while silver has a market cap of around $2 trillion this means that
an investment that would move gold’s price up by 1% would theoretically cause silver’s price to
move up by 10% notably the same is true for any divestment the result is that silver’s price
has been way more volatile than gold’s oh and since we’re talking about silver why not make this
your moment to shine hit those like and subscribe buttons to help the channel out and turn on those
notifications too so you don’t miss what’s coming next now just throwing the gold to silver ratio
at you and calling it a day wouldn’t exactly make for a great video would it well don’t worry
because the gold to silver ratio is just one of many factors getting everybody excited about
silver as it happens silver’s price isn’t just being supported by speculative investors but also
by silver’s ever growing demand across a number of industries in fact industrial use cases have
accounted for more than half of silver’s global annual demand over the last 5 years this is
because physical silver is incredibly versatile for instance silver has the highest conductivity
of any element when it comes to electricity and heat and is also known for its sensitivity
to light and its antibacterial properties this makes silver invaluable for a wide range
of industrial applications including brazing alloys batteries data chips dentistry EV
production 5G technology glass coatings LED chips medicine nuclear reactors photography
solar energy semiconductors touchscreens water purification wood preservatives and much much
more besides and what’s great about silver is that even as industries become outdated they’re
usually replaced by newer technologies that also require silver this is why silver is described
by some as being the quote indispensable metal for reference there can be anywhere between 25 and
50 g of silver in the batteries of most electric vehicles since silver is both highly conductive
and lightweight meanwhile there are roughly 20 gram of silver in your average solar panel thanks
to the metal’s thermal efficiency and reflectivity and silver is also used in medicine that’s
because adding silver to water releases silver ions that kill and prevent biological growth
helping hospitals to sterilize water systems furniture surgical equipment and so on and of
course silver is also used in smartphones now while there’s only a small amount of silver
in each smartphone less than half a gram this quickly adds up on a global scale when you
realize that well just about everybody has a smartphone these days i bet that’s how many of
you are watching this video anyway the point is that industrial demand for silver is only going
to continue growing now this could go a long way towards supporting silver’s price providing a bit
of resilience against any downwards price [Music] be music to many an ear there is an elephant in
the room that we need to address silver’s previous all-time high was set way back in January 1980
when it hit a price of $49.95 per ounce and while silver’s chart does look promising there’s still
a long way to go before it breaks through this level the reason why silver’s price spiked back in
the day is actually pretty interesting so to keep things short and sweet three billionaire siblings
known as the Hunt brothers worked together to pump the price of silver it’s believed that they
accumulated over 100 million ounces of the stuff then roughly a third of the world’s privately held
supply this caused silver to rally from $6 per ounce to almost $50 per ounce needless to say
plenty of other investors caught on going allin on silver in the hopes of making gains of their own
however many including the US government saw this as a clear attempt to manipulate the silver market
so Uncle Sam stepped in the commodity exchange or COMX placed heavy restrictions on new purchases of
silver which led to a rapid decline in its price this created panic among investors driving prices
down even further silver’s price collapse was so devastating for the markets that it actually has
its own name Silver Thursday but of course all this was decades ago specifically from January
1980 until the 27th of March 1980 which was when silver Thursday happened there was one other
time when silver went parabolic however and even came extremely close to its previous all-time
high this was in April 2011 when silver reached $47.94 per ounce so then what caused it to pump
that time well the short answer is investor demand in 2011 the Federal Reserve had committed to
maintaining a zero interest rate policy for another 2 years which basically signaled that the
Fed was easing monetary policy naturally this also meant that inflation was right around the corner
so people flocked to assets like silver to hedge against these measures to make matters worse the
US government then began debating its debt ceiling which caused Standard and Pors to downgrade Uncle
Sam’s credit rating this downgrade raised serious concerns about the stability of the US dollar
making precious metals much more appealing as safe haven assets since that rally subsided though
silver’s price has stayed relatively stable assuming you don’t count the leg up caused by the
pandemic however silver’s price has been slowly creeping up since Q1 of last year and we believe
it could be perfectly positioned to explode higher so then how high could Silver’s price
realistically go in 2025 to determine that let’s take a look at what some of the experts have been
saying and work out our own reasonable target from that so on the lower end we have City Bank which
predicts that silver will reach just $35 per ounce in 2025 this forecast is also matched by Morgan
Stanley meanwhile UBS is slightly more optimistic giving a silver price forecast between $36 and $38
per ounce so presumably $37 is what they see as a reasonable target goldman Sachs also predicts that
silver will reach $37 per ounce in 2025 elsewhere JP Morgan is slightly more bullish giving a price
prediction of $38 per ounce which is the same forecast given by Deutsche Bank meanwhile Saxo
Bank and Wisdom Tree both give price forecasts of $40 per ounce for silver investing Haven is the
most bullish by far though giving a silver price prediction of anywhere between $48.20 and $50.25
what this means is that if we take the average across all of these predictions this gives us an
overall forecast of $38.80 per ounce of silver in 2025 we should note that at the time of shooting
the price of silver is already around $33.60 so this translates to a 15% rally from here here’s
the thing though these predictions were made by experts who can’t afford to give outlandish
price forecasts that’s simply because if they’re drastically wrong it would instantly damage their
credibility and potentially hurt their business in the process with all the momentum building in
the silver market right now we wouldn’t be at all surprised if silver’s price actually rallies far
beyond that average from our perspective there’s a key resistance level at around $3520 however
if it can push past this level and we believe it can silver’s next resistance level is at around
$41.35 with another at around $42.90 note that this is a 2025 forecast now all this might sound
incredibly bullish but there are a few obstacles that we need to consider the first relates to
the very reason why precious metals like gold and silver have been rallying in the first place
uncertainty you see the reason why precious metals have seen significant price appreciation recently
is because most investors see them as a safe haven this is due to a number of factors such as rising
geopolitical tensions from the ongoing conflict in the Middle East to the war in Ukraine and the
rising trade tensions between the US and several other global powers uncertainty is everywhere as
tensions rise assets like silver become much more attractive for investors of all kinds however
some of these tensions are slowly beginning to ease a ceasefire between Russia and Ukraine
is currently being discussed and while there’s certainly a long road ahead before the conflict
is resolved things are at least moving in the right direction now this is obviously great news
but the harsh reality of the market is that as uncertainty begins to fall so too does the appeal
of safe haven assets like silver another cause of uncertainty meanwhile is Trump’s tariffs that’s
because many investors have been worried that Trump will implement tariffs on precious metals
as part of his wider tariff regime this has caused many investors to scramble to move their gold
to the US before it’s too late causing supply concerns in the process that have helped pump
gold’s price and you can learn more about that in our recent video right over here however if
it’s confirmed that tariffs won’t affect precious metals this uncertainty instantly disappears
and silver’s appeal as a safe haven asset will immediately lose some traction the same is true if
the final tariffs turn out to be much less severe than investors expect industrial demand for silver
could also fall especially in the green energy sector recall that this is a major demand driver
for silver however Trump has recently signed executive orders that essentially move away from
renewable energy and back towards fossil fuels this could deal a huge blow to green energy and EV
companies which you’ll recall use silver in their production and of course this all assumes that
gold investors will rotate into silver in the first place many market analysts believe that
gold investors could actually rotate into gold mining stocks instead and that’s simply because
the increase in gold’s price means that these companies are much more profitable alternatively
investors could move out of physical gold and into Bitcoin which is seen by many as digital
gold that’s because BTC has a capped supply of 21 million and is completely decentralized unlike
gold’s infinite and uncontrolled supply like gold BTC is also used as a store of value and its
added volatility means that many see Bitcoin as a high-risk high-reward gold play just like
silver btc is also becoming increasingly popular among institutions and heck the US government
recently created a strategic Bitcoin reserve this could attract traditional gold investors to
Bitcoin since the regulations around crypto are now greatly improving but back to silver and the
question of what potential catalysts are on the horizon that could significantly pump its price
well one of the biggest catalysts could be the Federal Reserve easing monetary policy the Fed’s
recent forecast suggests that it expects to cut interest rates twice this year as we mentioned
earlier if the Fed does decide to cut interest rates this could lead to fears that inflation
will return with a vengeance drawing investors to safe haven assets like silver at the same time
fiscal spending by the US government could benefit silver’s price in multiple ways for example Trump
is pushing to increase military spending in the US this could support silver’s price since silver
is used in things like weapon systems missiles radar and satellites the industrial demand for
silver should also continue to grow globally making silver a top choice for institutional and
retail investors in fact the speculation around the silver market alone could even be enough to
pump silver’s price in the short term this could also cause physical supply constraints for silver
as its available supply is limited compared to the high volumes of paper silver derivatives traded
in the market and as demand for physical silver increases the supply could tighten potentially
leading to a shortage this could drive silver prices much higher much like how the recent
liquidity shortfalls have pumped gold prices and I’ll remind you that you can learn more
about gold’s supply concerns using the link in the description below so while silver doesn’t have
the glitter of gold nor the incredible technology of Bitcoin it’s definitely still an asset to watch
carefully okay folks if you like that video then show it some love by smashing those like and
subscribe buttons if you want to learn about tokenized gold you can check out our recent video
on that right over here and if you want to learn about what gold’s rally means for BTC’s price
then you can check out the video right over here okay that’s me for now thank you all for watching
and I’ll see you next time this is Guy signing off
