Investors are seeing a jump in the silver price in February, with spot silver briefly US$18.90 gold up $39 to US$1690 at the end of last week, while roller coasting down to $18.00 and $1635 respectively today. Who would have thought that nearly 11 months since it reached 93:1 The silver/gold ratio is still hovering near all time highs at 91:1. Where will silver be when it corrects back towards 80:1 and lower? $25? $30?
What is driving silver and gold prices higher? Many think it is a flight to safety as the China Corona Virus is rapidly spreading from its source in Wuhan, China ,around the world and investors are getting really nervous, and just the latest thing that is bringing awareness to investors of the need to own silver and gold.
And what is the cause for the just occurred correction? Fear of commerce being stifled, as Italy, Japan and Korea have all been hit, while at the same time significant senior markets are in turmoil, probably triggering stop losses, as well as margin call. Everyone is going to affected by this in the short term.
Aside from the Fed, and others, printing money to cover (feed) Repo Madness, that is going into black holes somewhere, there are multiple scourges hitting many countries. Plagues of locust in East Africa originating at the Horn of Africa will probably lead to famine in those countries. The two forms of swine flu/fever (African swine fever) that is having a significant impact on pork supply, and prices. China with reports that 50% of China's pigs have been killed, (culled) plus the two types of avian flu, one hitting bird, with the other affecting people.
Then there are the substantial number of severe weather events around the world affecting investor perceptions.
So many questions, and not one satisfactory answer, other than the facts. Silver dropped US$0.94 cents in the last 24 hours, or 5%, ouch. Gold did a number on the gold bugs, $1690 to as low as $1620, or around 4%., with most silver and gold investors anticipating $20 silver and $1700, and higher, gold.
Does one take it that share prices of the juniors are still on sale, especially with the TSX Venture Exchange Index down 20 points to 547, nearly back to the all time lows.
So is your glass half full, or half empty, as both silver and gold are much higher than they were a year ago, and, despite the brutal takedown yesterday, are probably going higher. No one said it would be plain sailing. Sometimes you tack, sometimes you get laid flat aback. Sometimes you are becalmed, or like today, go to storm sails, or even heave to. But knowing the vagaries of the precious metals markets, keep your eyes on the horizon. Keep a weather eye out, and steer for your goal. Profits.
Enough of sailing metaphors and jargon. As the Chinese saying goes, "may you live in interesting times" and interesting times they are. For all of us.
Bayhorse Silver
