Go Big on Silver With 1,000-Ounce Bars

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by Peter Schiff, Schiff Gold:

Silver enjoyed a moment in the sun when the Reddit investors turned their attention to the white metal. Silver has since faded from the headlines but it remains an attractive investment option. As one portfolio manager put it, sub-30-dollar silver “is the most attractive macro-economic asset in the world.”

For investors who want to go big and take advantage of what is effectively silver on sale, SchiffGold offers the 1,000-ounce silver bar.

That’s nearly 70 pounds of pure silver. Or to think of it another way, the equivalent of 1,000 American Silver Eagle coins.

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One thousand-ounce bars are the least expensive and most efficient way to invest in the white metal with the lowest price per ounce above the metal’s spot price you will find.

SchiffGold offers 1,000-ounce bars from both private and national mints. They are produced from fine .999% silver. They generally weigh between 930 ounces and 1080 ounces and are sold based on their exact weight. SchiffGold can help you with vault storage for your bars. or you can take delivery of them.

BULLISH ON SILVER

There are plenty of reasons to be bullish on silver and now might be the best time to make a large investment in the white metal.

Central banks are flooding the world with easy money and unprecedented stimulus. This excessive liquidity will almost certainly push inflation pressure even higher. At its core, silver is a monetary metal. In fact, it has been used as money for thousands of years. As government fiat currencies devalue, silver and gold both tend to hold their value as the prices increases in dollar-terms. The money supply increased at a record pace last year as the Federal Reserve responded to the COVID-19 pandemic. And there is no sign that the money printing will abate.

The Fed’s expansionary monetary policy has already driven investment demand for silver to five-year highsSilver coin and silver bar sales in the US have helped push the big gains in investment demand. Retails sales were projected to rise by 62% on the year.

Even with the run-up in the silver price thanks to the messageboard investors, silver remains historically undervalued compared to gold. The silver-gold ratio is still over 65-1. This is historically high.

The silver-gold ratio simply tells you how many ounces of silver it takes to buy 1 ounce of gold. The average in the modern era has been between about 40:1 and 50:1.

Since the world went to a total fiat money system, there seems to be some correlation between the silver-gold ratio and central bank money-creation. During periods of central bank money-printing, the gap tends to shrink. In fact, it plummeted in the aftermath of the 2008 financial crisis as the Fed engaged in extreme monetary policy.

Looking at the current silver-gold ratio indicates that silver is still undervalued. That means, in effect, we have silver on sale.

Finally, the supply and demand dynamics look good for silver.

While silver is fundamentally a monetary metal, more than half of global demand comes from industrial and technological applications.

As you would expect, non-investment silver demand dropped in 2020 due to the economic contraction sparked by government response to the COVID-19 pandemic. But the market has shown signs of recovery. Analysts expect industrial demand will rebound further as the global economy begins to recover from the impacts of the coronavirus pandemic.

Silver demand will likely get a boost from the push toward solar power and other green energy initiatives in the coming years. Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute. Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.

On the supply side, mine output fell sharply in 2020.  Production was projected to fall by 6.3% to about 780.1 million ounces.  The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.

All of these dynamics indicate now is likely an excellent time to invest in silver. At current prices, we have “silver on sale.” Even the mainstream is bullish on the white metal. Saxo Bank recently projected silver will soar to $50 an ounce in 2021 and Bloomberg Intelligence made a similar call.

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