1st American Reserve Blog

“Soaring Silver Prices Lure Haven-Seeking Investors” --Wall Street Journal, May 19, 2020

Last Tuesday, the Wall Street Journal reported, the nearest-month silver futures price reached $17.892 per Troy ounce, rising 14% in the past four sessions and +52% from its March low. This is in immediate response to news of a promising coronavirus vaccine development the previous day but more in response to the 50 states announcing a variety of plans for opening up their states to business in June and beyond.

The progression of the gold-to-silver ratio this year marks the influence of the coronavirus on business:

Gold soared during the coronavirus scare while the industrial commodities retreated. Now, silver is returning to favor, with the gold/silver ratio finally retreating back to 100-to-1. Silver has an additional attraction, as the Journal article shows, as a “safe haven” during crisis times. Silver has a double role as an industrial metal (about 60% of demand), with jewelry (20%) and bullion coins and bars (20%) giving silver added glitter as a precious metal. As part of the bullion demand, silver exchange-traded funds (ETFs), like the iShares Silver Trust, have posted big inflows, and they must buy an equivalent amount of physical bullion to match the paper demand from ETF investors. London-based research firm Capital Economics said, “We think safe-haven demand for silver will continue to be a key driver of prices.”

Whenever gold and silver prices are rising, as they are now, and major newspapers and magazines back them up with positive articles, coin dealers place more ads, and those ads bring in more new customers than usual. Then, a larger percentage of those callers will buy bullion coins. Within 6-24 months, a good percentage (say 10% to 20%) will graduate into rare coins, pushing up the prices of select rare coins.  Demand for popular rare coins is increasing.  Call us today to find out about our latest purchases.