Gold edges higher in early trading. Silver leads gold short-term, but lags over the long run.
(USAGOLD – 4/20/2021) – Gold edged higher in overnight trading as yields steadied and the dollar dropped marginally. It is up $4 at $1776. Silver is up 15¢ at $26.05 and continues to lead gold on turns to the upside. Over the past fifteen months of pandemic-induced monetary disarray, silver is up 43% to gold’s 16%. “Silver,” says Equity Management Academy in an article posted at Seeking Alpha, “is an excellent opportunity to hedge against the US dollar and to take advantage of what could be one of the most explosive moves in the silver market in history. Silver is real money. It is also an industrial metal, which will be in greater demand as the economy recovers. But, as real money, silver will greatly benefit from the devaluation of the US dollar.”
Chart of the Day
Gold, silver, stocks
(Percent gain, 1971 to present)
Chart courtesy of TradingView.com • • • Click to enlarge
Chart note: Analysts with an agenda tend to hand-pick the time sequence which best suits their argument. We have always maintained that the most logical starting point for judging the performance of investments over the long-haul is 1971 – the year the world went off the gold standard and entered the fiat money era. With that in mind, it is interesting to note that silver has been the laggard when compared to gold and stocks. Since 1971, silver is up 1507%, while stocks and gold are up 3813% and 4519% respectively. At the same time, over the 15 months of the pandemic-induced monetary disarray, silver is up 43% while gold and stocks are up 16% and 18% respectively. In short, silver looks to be playing catch up, and if that continues to be the case, the chart implies that there still might be considerable ground left to be covered.