Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance Dear Reader, Fifteen months ago, I told you something that probably sounded crazy. With silver trading at $30.68 and the gold-silver ratio sitting at an astronomical 84:1, I said we were looking at a screaming opportunity. You can check the receipts right here. Most investors were chasing tech stocks and AI plays. Central banks were buying gold. Silver was the forgotten stepchild. Last night, spot silver hit $80+. But here's the context that makes this even more remarkable: Silver's up 160-170% year-to-date in 2025, absolutely crushing gold's 55% gain. This isn't just my September call paying off - this is a fundamental shift happening in real time. But here's what everyone's missing: this party might just be getting started. Or it might be about to get ugly. Why the September Call Worked Remember what I said about that 81:1 ratio? Historically, ratios between 30-40 signal bull markets for silver. At 84:1, silver was screaming undervalued compared to gold. The fundamentals were lining up perfectly: - Fed cutting rates (check - they delivered that 50bp cut in September)
- Inflation concerns mounting (check)
- Geopolitical uncertainty exploding (check)
- Government debt spiraling (bigger check)
But here's the thing: silver didn't just catch up to gold. It's been outrunning it, exactly like it does when the ratio starts collapsing. Understanding the Gold-Silver Ratio (A Quick Refresher) For those new to this concept, the gold-silver ratio is simply the current price of gold divided by the current price of silver. It tells us how many ounces of silver equal the value of one ounce of gold. Using today's prices: Gold-Silver Ratio = $4,400 / $73 = 60.32 This means it currently takes about 60.32 ounces of silver to equal the value of one ounce of gold. Historical Context That Changes Everything The history of this ratio tells a story that should make every investor pay attention. Ancient times: In Roman times, the ratio was fixed at 12:1 by government decree. U.S. Bimetallism Era (1792-1873): America legally set the ratio at 15:1, later adjusting to 16:1. These weren't arbitrary numbers - they reflected real economic relationships. But here's where it gets interesting - and dangerous: The Great Depression (1929-1939): The ratio spiked to 98:1 by 1940 as fear drove investors to gold. The 1970s: Started around 20:1-30:1, then plummeted to nearly 16:1 in 1979-1980 during the Hunt brothers' silver squeeze. The 1980s: Recession drove it to 70:1 by 1983, touching 80:1 before the 1987 crash. The 1990s: Hit an all-time high of 100:1 during the 1991 recession. 2008 Financial Crisis: Jumped to 80:1 initially, then collapsed as silver exploded during the recovery. 2011: The ratio hit just 31:1 as silver approached $50/oz - that's when silver was expensive relative to gold. COVID-19 Pandemic (2020): Record high of 123:1 during the March panic. Today at 60.32, we're sitting right in the middle of historical extremes - but here's the crucial insight: Every time the ratio has been this high or higher, it eventually crashed back toward those 30-40 levels. The only question is timing and magnitude. With gold at $4,400, that historical mean reversion could drive silver to $110-125. We're not talking about hope - we're talking about historical precedent. What the 60.32 Ratio Is Telling Us The gold-silver ratio has collapsed from 84:1 to 60.32 as I write this. That's massive compression in just 15 months - exactly what I predicted would happen. But we're still well above that historical sweet spot of 30-40 where silver really explodes. And here's what most people are missing: Gold is at $4,400. The math that should shock you: If the ratio drops to 40 (still conservative by historical standards), silver would hit $110. We're currently at $73. If the ratio hits 35 (the sweet spot of previous silver bull runs), we're looking at $125+ silver. Think about that. Silver has already gained triple-digit returns from my October call, but if it just catches up to where gold has gone, we could see another 50-70% move from here. The prediction: This isn't just ratio compression - this is silver playing massive catch-up to gold's explosion to $4,400. The fundamentals driving gold (currency debasement, debt spirals, geopolitical chaos) apply even more to silver because of its industrial demand overlay. We could see the ratio test 50 within months. Below 45, and silver enters that explosive territory where $100+ becomes the floor, not the ceiling. But remember: These are the same fundamentals that took gold from $2,000 to $4,400. Silver's just been late to the party. When it catches up, it won't be polite about it. | 
0 Response to "♟ I Told You Silver Would Explode (Now What?)"
Post a Comment