Img Source: https: //www.joya.life/blog/la-magica-plata-pura/
Silver is an industrial metal. This means that its demand depends on economic activity, and in times of recession it should drop. The surprise is that, in addition to being industrial, it is a monetary metal.
Silver is synonymous with money, just like gold. Because of this, when the crisis awakens, investors seek refuge in silver as well as gold.
In fact, it can be much more profitable to take refuge in silver.
And why?
Silver has a much lower capitalization than gold. Only $ 15 billion is invested in this market, which is a ridiculous amount compared to all the money in the world. Why invest in silver?
Let's see.
Its low capitalization results in a low price. This causes an ounce of silver, can be purchased for $ 15, and an ingot for $ 600 -although these days we are seeing how physical silver is priced at significant premiums. - Very cheap price, especially if we compare it with gold .
To spend money on a gold bullion, you already need capital.
Silver is the gold of the poor, the money of the humble foresight who want to protect themselves from bad times.
This means that when rainy days arrive, the demand for this metal grows exponentially, increasing its price value.
What levels could we expect for silver?
Currently, 120 ounces of silver equals 1 ounce of gold. That is an extremely unfavorable price relationship for silver, and since everything is cyclical, it is most likely going to correct itself.
In the bullish cycles of the metal, an ounce of gold had the same value as 16 of silver. Let's compare with the 1/120 ratio of today.
Let's do a calculation with a gold at $ 5000.
If the 120/1 ratio is maintained, the price of silver would reach $ 41.66, which means multiplying its price by 4.
But that is the pessimistic projection! Since if we start from a 16/1 ratio, we find this.
5000/16 = 312.5.
312.5 could be a far-fetched price for silver. I am not going to deny that this projection is tremendously optimistic - there are still those who predict a higher price - but it could happen. However, what we can conclude is that the next few years is more than likely a growth in money demand for this metal, causing its price to climb to at least $ 100.