For the past few years silver has been viewed as gold's poor relation.
Unloved and underperforming in terms of price.
However, since July there has been a renewed interest in silver, currently trading at or around year highs. In July, silver ETFs added 20 million oz, taking total holdings to a cyclical high near 550 million oz. Open future interest increased significantly.
So why is this the case?
Many investors I have spoken to believe that silver looks cheap on a relative basis to gold. Others point to the booming solar industry in China, which should help silver demand. Silver has the advantage over gold in that it is an industrial metal as well as a precious metal. As was said at Mines and Money London last year “every metal is a battery metal now”.
However, there is a third reason.
Ian Williams runs a silver-weighted fund for Charteris. In 2016 his fund outperformed the Blackrock Gold & General fund by 73%. In the same year it was named the best performing UK fund that year.
Ian’s belief is that “in a bull market silver is virtually guaranteed to outperform gold”, a view held by many fund managers and analysts.
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I know that that is not yet how this market is developing: gold has been rising with silver lagging behind. As a result, just last week the gold to silver ratio (GSR) reached 93, its highest level in almost 30 years (although it had dropped back to 85 at the time of writing this article).
However, I can see this changing, as investors realise that silver offers excellent opportunities to outperform the market.
Given Ian’s track record as a fund manager, I’m delighted that he, along with Shayne McGuire, Portfolio Manager, Emerging Markets and Gold Fund, Teacher Retirement System of Texas, and Simon Popple, Chief Executive Officer, Brookville Capital, will be debating ‘Is 2020 the right time to go back into silver?’ at this year’s Mines and Money London.
We are not only in the early stages of a gold bull market, but also a silver bull market too.
Interested in meeting with companies who have projects exploring and producing silver? Meet with leading miners, such as White Rock Minerals and Trevali Mining, and this year's Mines and Money London, taking place at the Business Design Centre, London, 25-27 November 2019.