Silver Fundamentals Are Strongest Ever

Peter Schiff just released his new research report entitled “The Powerful Case for Silver” (pdf format). In it, he explains why the upside potential of silver is greater than the one of gold. Peter Schiff believes that the fundamentals for silver are the strongest they have ever been and that silver is massively undervalued at today’s prices.

The fundamentals of silver explores three key fundamentals of silver:

  • Silver’s value as a barter currency
  • Current and future demand for silver as an industrial metal
  • Silver’s current undervaluation relative to gold and dollars

The following excerpt from the introduction (page 2 of the report) shows that the reasons for buying PHYSICAL silver are also the easiest to understand.

1. Silver is the everyman’s gold
Investors all around the world are worried about the weakening US dollar and already imagine a day when the world’s reserve currency will be worthless. Throughout history, whenever the value of fiat currencies became unreliable, governments and citizens turned to the stability of precious metals to transact day-to-day business. But gold’s high value-to-weight makes it impractical for daily transactions. Silver, on the other hand, is a very convenient medium of

2. Silver is a valuable industrial material
Because silver conducts heat and electricity better than any metal on earth, more than half of annual global silver production is destined for industrial use. Even in the midst of a Western economic downturn, industrial silver demand from emerging markets is projected to hit new highs in the coming years.

3. Silver is undervalued relative to gold
Back when paper currencies were actually backed by precious metals, the historic ratio of the value of an ounce of silver to an ounce of gold was about 16:1. Recently, that ratio has stood around 61:1. Given today’s gold prices, if silver were to realign with its historic ratio, it would be worth over $60/oz! If you think gold has yet to find its ceiling, there is good reason to believe silver’s rally will be even more dramatic.

Silver has characteristics of a monetary asset but also from a commodity in the “traditional” meaning of the word. Hence supply and demand factors are likely to have a bigger impact on its price. In that respect retail and industrial demand for silver bullion are important. The following chart shows demand for silver coins (US American Eagles). The chart shows how overwhelmingly retail investors have been buying silver in 2013.


Furthermore, based on the chart below it appears that the decreasing usage of silver in photography is largely offset by increased demand in other industrial applications.



Other interesting topics that are covered in the report include silver’s (historic) role as money, the international currency war, examples of specific industrial applications of silver, tips for buying silver, silver scams to avoid, the future of silver.

Download the 14-page report “The Powerful Case for Silver


Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing