By Robert Hallberg
Eric Sprott, the founder of Sprott assets management has repeatedly said that gold was the investment of the last decade but silver will be the investment of this decade, and by looking at some of the fundamentals he might just be right.
There is currently an equal amount of investment money going into silver as there is for gold, yet the gold/silver ratio is close to 50:1, which means that investors are buying 50 ounces of silver for every ounce of gold. Not only that, but there is nowhere close to as much silver available for investment as there is for gold.
The chart below shows the gold/silver ratio for the last couple of years. This ratio is currently at 50:1 but the historical average over the past couple of hundred years have been around 16:1 which also represents the gold to silver concentration available in the ground. With a 16:1 ratio, silver would be priced over $100 in today's market, yet there are good reasons to believe that gold is going much higher. With such a strong demand for physical silver it is seems likely that we will once again see a 16:1 ratio, perhaps towards the end of this bull market.
There is currently an equal amount of investment money going into silver as there is for gold, yet the gold/silver ratio is close to 50:1, which means that investors are buying 50 ounces of silver for every ounce of gold. Not only that, but there is nowhere close to as much silver available for investment as there is for gold.
The chart below shows the gold/silver ratio for the last couple of years. This ratio is currently at 50:1 but the historical average over the past couple of hundred years have been around 16:1 which also represents the gold to silver concentration available in the ground. With a 16:1 ratio, silver would be priced over $100 in today's market, yet there are good reasons to believe that gold is going much higher. With such a strong demand for physical silver it is seems likely that we will once again see a 16:1 ratio, perhaps towards the end of this bull market.
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