The last major bull market for silver (prior to 2009–2011) was in the 1970s.
In the decade of disco, the price of silver climbed from $1.25 to $43.
The signs are clear… silver prices have been steadily climbing again. We’re headed toward another “golden” age for silver.
Another bullish sign for silver prices is the gold-to-silver ratio. When Rome ruled the world, the g/s ratio was set at 12 to one. One piece of gold was equal to 12 pieces of silver.
In 1792 the g/s ratio in the United States was fixed by law at 15 to one. Today the g/s ratio is at 67.96. That means gold is expensive and silver is cheap in comparison.
You see, four times in the last 30 years, the gold-to-silver ratio has dropped below $80. Each time that happened, the price of silver went on a major bull run.
And it is happening again right now. It means silver is stretched like a slingshot and the higher in price gold goes, the more it is stretched. At some point, silver will come flying back to the average gold-to-silver ratio of around 50. So if gold doubles, silver will go up much higher.
Right now gold is $1,317.50. The gold-to-silver ratio is at 67.96, which means silver is at $19.57.
If gold doubles like many people think to $2,800/oz. and the ratio remains the same, then silver will be at $34.66/oz. If you owned silver, you’d have almost doubled your money.
But given our historical analysis, it is more likely that the g/s ratio will drop to 50. This would put the price of silver at $52/oz., which means for the same long precious metals bet, you would have nearly tripled your money.
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