The newest “Thunder Road Report” appeared today. The author Ted Ferguson (associated to Seymour Pierce Equity Research) always succeeds in bringing an well researched message. In his latest edition, titled “Silver: right now (probably) the best asset in the world” he focuses on silver and its prospects.
This newest edition counts some 8 pages goes and the summary invites you to read the whole document:
For more than a century, the silver price has correlated most closely with a cycle based on the combination of two further statistically significant cycles in silver prices lasting 5.58 years and 31 years, respectively. The next peak in this combined cycle is forecast for July / August 2013, which would imply a new all-time high in the silver price in excess of US$50/oz (the current price is US$31.47/oz.). Having underperformed significantly from their most recent price relative peaks in 2011, the risk / reward trade-off for premier silver mining stocks, like Fresnillo (quoted in London) and Pan American Silver (North America) looks favourable.
The author analyzes two silver cycles: the 5.58 year and 31 year cycle. Those two cycles “predict” a new cyclical high in 2013 which would imply a new all-time high in the price of silver at something over US$50/oz. Please take this information for what it is: a forecast although a well researched one.
Apart from the silver cycle discussion, Ted Ferguson makes the fundamental case for silver at the end of the document, based on the following criteria:
- Above-ground silver stocks are estimated to belower than those for gold
- A significant proportion of gold reserves are heldby central banks
- Gold/silver ratio has averaged 15-16x over thelast two thousand years
- Investment demand will compete with industrialdemand going forward