"Everything you need to know about gold"
Over the years (and decades) silver travels a path fraught with excitement and disappointment. Both the excitement and the disappointment stem from three things that are killing silver – unrealistic expectations, inflation, and time.
UNREALISTIC EXPECTATIONS
The unusual conditions leading to the explosion in the silver price in the late 1970s are unlikely to happen again in a similar context…
If you are still waiting on silver to bring you huge profits, your wait just got longer. Below is a chart (source) of SLV prices for the past week…
Silver prices gapped significantly lower at the open on both Thursday and Friday. The combined loss for the two days is almost six percent.
It’s true that two days price action doesn’t tell the whole story, but contrary to what usually happens in fairy tales, this story isn’t likely to end in similar fashion. The phrase “happily ever after” does not apply.
Nor can it be said with any conviction that there is a positive side to silver’s recent price action. No matter how optimistic silver investors are, false hopes are still “false”.
Below is a two-year chart of SLV…
While it is not drawn on the chart, there is an uptrend line of support which dates back to March 2020 and which was decisively broken earlier this summer in June. At that time, silver prices gapped down sharply, too; and again in August.
At this point silver prices are down more than 25 percent from their highs last August and appear to be headed lower. It isn’t unreasonable to expect SLV to land somewhere around $18 and spot silver at $19-19.25 – at least temporarily.
IS SILVER REALLY CHEAP?
In May 2021, I published an article titled “Are Silver Prices Really Cheap; And Does It Matter?” At the time, spot silver prices were approximately $27 oz.
The February Reddit false alarm was in the rear view mirror, and the silver price seemed to be consolidating at about ten percent below its high from last August which was in the vicinity of $30 oz…
“On an inflation-adjusted basis, most of the price history for silver is still under $20 oz. Even on an inflation-adjusted basis, silver is still more expensive than almost any other time in the past one hundred years.”
Silver back below $20 oz. is like returning home after a fun vacation. Familiar territory, but not much to get excited about.
Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED!