Silver: Poised To Strike At All-Time Highs?

Source: Stewart Thomson 02/10/2025

Newsletter writer Stewart Thomson addresses a key metals market question: Is silver bullion poised to strike at all-time highs?

There has been talk of making Bitcoin a U.S. Treasury holding like gold . . . and perhaps that opens the door for silver, too. Whether that happens or not is unknown, but what can be said is that silver is the metal of the “little guy and gal,” and at times, it dramatically outperforms gold.

Below is a long-term (55 years!) look at silver.

Bullish flag-like action is apparent on the chart, and the entire period from 1978 to 2025 is arguably a loose but massive rectangle, targeting the $95-$100 price zone. Loyal silver bugs may be a bit frustrated as they watch gold trade at triple its 1980 fiat price high while their silver is far below its own 1980 high of about $50. I’ll suggest there are reasons for newfound hope and will detail some of those reasons now.

Here’s the silver versus gold ratio chart (also a 55year chart):

At first glance, this chart looks like a bowl of technical slop, but investors should consider fundamentals when looking at any chart.

On that note, silver does best when there is a lot of “boots on the ground” inflation. The last time that occurred in a structural way was in the 1970s . . . and a new long-term period of inflation (much bigger than in the 1970s) may have started in 2020.

Here’s a long-term U.S. rates chart:

There’s a potential bull flag in play, and it can be argued that a 40-year rate and inflation cycle bottomed in 2020, after peaking in 1980 and bottoming in 1940. Fundamentals are supportive of this thesis; the U.S. stock market sports a CAPE (inflation-adjusted P/E) ratio of 38. That’s nosebleed high. In contrast, the Chinese stock market’s CAPE ratio is only 14.

At some point in 2025, the Chinese market is likely to begin a new long-term bull market, and the U.S. will face an angry bear.

Will most U.S. citizens be comfortable investing in China if their stock market tumbles into the abyss?

No, but they are likely to be quite comfortable buying a “little guy and gal” metal . . . a metal that can only be silver!

What about the silver miners?

Well, in the East, most gold and silver bugs (3 billion of them!) focus on bullion. In the West, investors like the mines.

Here’s a look at an intriguing weekly chart for the SIL silver stocks ETF:

The technical action is superb. Note the approaching MACD buy signal at the bottom of the chart. Stochastics can run much further before even approaching the overbought marker.

There’s also a breakout from a flag-like drifting rectangle and here’s the bottom line: I rarely suggest investors engage in a “price chase” of anything but this could be one of the rare times (like the period of 1970-1978) where it could be incredibly profitable to do so.

Allocations?

Well, some metal enthusiasts like a mix of 70% gold, 15% miners, and 15% silver, and that’s probably a decent play. Others are more aggressive and prefer to hold more miners and more silver.

Given the inflation-dominated outlook for the coming 35 years, I’ll suggest that almost any metals-themed mix is likely going to work out better than having no metal or miners at all!

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Stewart Thomson Disclosures

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

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