In a recent article for Kitco, Jim Wycoff noted that there have been some very recent near-term technical developments that suggest the US stock indexes have bottomed out, while the US dollar index has peaked. This could be a sign that inflation is at its peak and that the Fed might soon be putting a pause on its aggressive rate hikes. If this is the case, it would eliminate a major headwind for silver and other precious metals. Wycoff points out that this is just one possible scenario, and that only time will tell how things will ultimately play out. However, he believes that this is a development worth watching closely, as it could have major implications for the precious metals market.
Silver Prices Set to Skyrocket
Earlier this month, the best selling author of "Rich Dad, Poor Dad" Robert Kiyosaki tweeted “BUYING OPPORTUNITY: if FED continues raising interest rates U.S. $ will get stronger, causing gold, silver & Bitcoin prices to go lower. BUY more. When FED pivots and drops interest rates as England just did, you will smile while others cry.”
In subsequent tweets, Kiyosaki said that he believed the dollar’s strength to be temporary and that it could very easily follow the footsteps of the English Pound Sterling following a Fed pivot. He believes that silver could jump anywhere from $100 to $500 within this decade. The author also noted that during the 20th century the gold:silver ratio was at 47:1. It is currently 83:1, making silver a huge benefactor when that ratio regresses to the mean.
"Anything that can be printed, like a stock certificate, a bond, or a dollar, I don't want it," Kiyosaki noted. "I'm a hardcore gold, silver, oil, and food buff… I'm a hardcore hard assets person."
While silver has historically played second fiddle to gold, its use as an industrial metal could give it an edge over its more precious counterpart in the years to come. Unlike gold, silver has utility as a store of value but it is also a critical ingredient to several technologies that are going to become increasingly important. Silver is an essential component of solar panels, cell towers, and electric vehicles. As renewable energy becomes more prevalent and communication infrastructure expands, the demand for silver is only going to increase. Furthermore, with electric vehicles expected to make up a significant portion of new car sales in the coming decade, silver could see a resurgence in popularity. While it remains to be seen if silver can unseat gold as the king of precious metals, its unique properties make it well positioned for success in the 21st century.
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