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The discount in silver allows you to buy Silver calls - rather than Silver or Gold,

 

You probably get a similar (or better) upside as Gold, without the same downside

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Silver looking very good today, especially in GBP.

 

The miners already moved to new highs last week. We are witnessing the birth of a commodities bull market that will rip the stupid grin off Yellen's face over the next 5 years as the next stage of the global paper money experiment unfolds.

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gold_10_year_silver.png

 

 

Gold/silver ratio currently down to 77.25

 

The 10 year chart appears to indicate an excellent opportunity to buy silver.

Silver was 20 when the gold stocks were in current level.

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http://www.zerohedge.com/news/2016-04-14/case-closed-deutsche-bank-confirms-silver-market-manipulation-legal-settlement-agree

 

 

the lead defendant, troubled German bank Deutsche Bank agreed to settle the litigation over allegations it illegally conspired with Bank of Nova Scotia and HSBC Holdings Plc to fix silver prices at the expense of investors

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I expected this break out since gold exceeded the 1180$ October high some time ago, while silver was still lagging behind its own 16.40 high.

 

This 4 year decline has been brutal for investors.

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I expected this break out since gold exceeded the 1180$ October high some time ago, while silver was still lagging behind its own 16.40 high.

 

This 4 year decline has been brutal for investors.

 

Yes, it has absolutely destroyed "buy & hold" investors, which is probably why I will never advocate "hold forever" as an investment strategy, for any asset, except possibly your own home.

 

Been incredible to watch it play out and to witness first hand how sentiments turns from red-hot at the top to utter revulsion at the nadir. Still a good time to get back in imo. I think everyone is underestimating how high silver could climb this year - $20+ is not an outlandish target.. and not even than far away now.

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GSR is now down to 74.

 

Looking more and more likely that we have seen the peak @83.

 

Below 72 GSR and I will start to diversify into acquiring gold. I didn't anticipate to be doing this so soon at this stage of my precious metal stacking, but my model says to buy primarily gold at that level to build long term wealth, as gold is the better long term hold, while silver was the better short-term hold.

 

If GSR does spike up again to > 86 then it will be a good chance to sell any gold and buy more silver. These swap signals are only generated once every 4-5 years, so we are due one soon.

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Gold has exceeded the 1980 high (800) long time ago.

 

But silver is 1/3 of the 1980 high (50).

 

Silver is at a bargain price. If one looks at the 10 year chart, although there will be opportunities to swap silver for gold, the strategy is risky, while the gold/silver ratio

is still high. How would someone know when to swap ?

 

3650d_sm_gold_silver_ratio.gif

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Silver is at a bargain price. If one looks at the 10 year chart, although there will be opportunities to swap silver for gold, the strategy is risky, while the gold/silver ratio

is still high. How would someone know when to swap ?

 

 

 

My model uses a 71 month moving average, and then will trigger a swap signal if price moves above 2.3 standard deviations away from this level.. ie you can expect

 

I have found using these parameters (71 months SMA, 2.3SDs) would have generated the best returns over the last 48 years... far better than just using a fixed number that many analysts seem to think represents "fair price".

 

Of course, there is no guarantee that using the same parameters that proved optimal in the past will continue to be the best going forward. In fact, I am certain that they won't.. but they are a good starting point, at least.

 

 

https://docs.google.com/spreadsheets/d/12xiAkvM25aY0yNs6Z2gXBVDH8CFdI7lGf5sh8eZSXKg/

 

gsr.png

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Yes, my findings surprised me. They showed that gold has been the metal to buy & hold most of the time, and that a mixed gold/silver strategy did not outperform a gold-only portfolio, even if you did some swapping along the way based off a fixed GSR price. This is because gold has outperformed silver long term by 3%pa, so even if silver was a better short term buy, over the long term gold reasserts itself.

 

However when I threw out the fixed buy/swap price levels and replaced them based off moving averages silver I managed to get a significant bump in return by swapping gold|silver at very extreme price levels. You don't want to be doing this too often just because transaction costs will be significant, and actually the model showed me that once every few years was the best performing strategy anyway.

 

I am not suggesting that gold will continue to outperform silver by 3%pa over the next 48 years as it has in the last 48, but there is nothing to suggest that it the trend will reverse. Gold is money and the ultimate store of wealth, while silver is, at least for now, primarily an industrial commodity with some monetary qualities. That's why I believe that unless silver is remonetized, we will eventually see GSR at 100+ and trending higher in the future (even if we revisit 40-50 area first). I don't ever envisage the GSR returning to 15:1 the way the metals are being used at the moment.

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I am selling today HALF if the SLV calls that I bought two months ago, when I took a Short on Gold

 

435 vs 285 cost

 

The trade worked well. I covered half the GLD short last week

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I expect the silver induced rally in precious metals to continue (similar to April-May 2006) with break of resistances at 1280, 17.70 .

Gold/silver ratio below 72 but too early for upward correction in my opinion.

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SLV / Silver ... 3-years : 2-years - SLV: $ 16.64 - leading precious metals lower?

 

SLV_zpsxlmfifa6.gif

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A massively aggressive prediction for the price of silver to go to USD140 by 2019 on the back of surging industrial demand and a lack of investment in new production: http://www.bloomberg.com/news/articles/2016-05-26/miner-sees-silver-price-surging-ninefold-as-global-gadgets-boom

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Silver is now up 50% in GBP since the year end. Not a bad H1, eh?

 

Gold/Silver has hit a new low at 70.5.

We are on our way!

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I sold 15 of my 80 calls on SLV yesterday

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Silver is on fire. Through long term resistance. Now printing with a $19.xx handle.

 

This could move to the $23 area very quickly.

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