Silver/S&P 500 Ratio Update
We're starting to see some Crypto YouTube channels pivot to becoming experts on silver, which is something we predicted would happen back in 2023, but it's a little troubling to actually see it happening in real life…
On October 17th after silver hit $50 per oz and everybody started taking profits thinking that was the top… NIA sent out an alert entitled, 'Silver/S&P 500 Ratio Hasn’t Yet Returned to 20-Year Average'. At the time, we had a Silver/S&P 500 ratio of 0.0079. Click here to see.
In this alert, NIA said, "The Silver/S&P 500 Ratio hasn’t yet returned to the 20-Year Average of 0.0103 which would currently value silver at $68 per oz. The people who are taking profits on silver stocks too early and putting the money into VOO are pretty dumb. Worry about how much the S&P 500 will soon crash when the AI ponzi falls apart."
Since then, the Silver/S&P 500 Ratio has nearly doubled to 0.0149.
We still believe the S&P 500 crashing should be the biggest concern, but it doesn't mean a collapse in the S&P 500 can't cause silver to temporarily dip by 30%-50% before exploding to $200-$300 per oz.
We are most likely going to well above the August 2011 peak Silver/S&P 500 Ratio of 0.0389 within the next 2-3 years but expect a lot of volatility between now and then.
There are certain silver stocks like Highlander Silver (TSX: HSLV), Contango ORE (CTGO), and Minaurum Silver (TSXV: MGG) that are undervalued enough where they can rise even during a silver pullback… but for most other silver stocks this isn't the case.
Hycroft Mining (HYMC) is a meme stock there is no connection between its market cap and fundamentals. Eric Sprott has no way to exit.
We tried shorting HYMC on December 23rd and didn't get filled at $30 per share. If we shorted it, we would have covered it relatively quickly like when we shorted New Found Gold (NFGC) in November 2021 and covered within a few days. On January 6th, when HYMC was about to hit $30 per share, we sent out an alert saying, "Nickel futures are up by 7.90% this morning and if you look at in situ value Canada Nickel Company (TSXV: CNC)’s nickel resources have approximately quadruple the value of Hycroft Mining (HYMC)’s gold/silver. We aren’t going to short HYMC because silver will be $100+ per oz very soon, but at some point, in the future… CNC’s market cap will exceed HYMC and if CNC does well Noble Mineral Exploration (TSXV: NOB) will do even better."
Vale (VALE) over the long-term will outperform all other large-cap mining stocks.
Past performance is not an indicator of future returns. NIA is not an investment advisor. Always do your own research. NIA’s President has purchased 125,000 shares of HSLV and may buy or sell shares at any time. NIA’s President has purchased 5,000 shares of CTGO and intends to buy more shares. NIA has received compensation from CTGO of US$80,000 for a ten-month marketing contract. NIA is receiving compensation from MGG of US$100,000 for a twelve-month marketing contract and previously received US$60,000 for past marketing contracts which have expired. NIA is receiving compensation from NOB of US$50,000 cash for a six-month marketing contract and previously received US$50,000 cash for a six-month marketing contract which has since expired. This message is for informational and educational purposes only.