Silver Rises More than Gold in 2016 vs. the British Pound.
Silver Generally Falls More Than Gold in a Bear Market, Rises Higher in a Bull Market.
Silver, the Other Portfolio Insurance
Silver is up a staggering 56% against the British Pound in 2016. Silver’s rise is easily attributable to the rush to monetary safety caused by slowing economic growth, central bank incessant stimulus and zero and negative interest policies and uncertainty engendered by the Brexit vote.
Gold is up 40% year to date vs. the British Pound as institutional investors piled into gold and gold ETFs. Silver is up even more than gold because the silver market is far smaller and therefore more price sensitive to increases in physical demand. At prices under $20 an ounce silver, is far more accessible to small retail buyers.
Retail buyers bought more than 110 million ounces of silver coins in 2015. In 2016, the pace of silver sales at the major sovereign mints was up more than thirty percent in the first quarter from 2015’s record pace.
Silver sales continue to surge at the major sovereign mints.
When gold rises, silver rises even more. Or when a currency weakens, it weakens even more againt silver.
Gold vs. the British Pound 2016
Gold rose from about £715 to nearly £1,000 in 2016.
In “Gold as Insurance – The Lesson of Brexit” we noted
“Gold is not a bet against human ingenuity. Gold is a hedge against inevitable human mistakes.”
Silver, likewise is also not a bet against human ingenuity. Silver is a hedge against central bank folly and global economic certainty, and an insurance policy that often pays back more than the losses it may insure against. Purchased at the right time, silver can be insurance with a lower premium than gold that provides a larger payout.
Silver’s rise from about £9.50 to nearly £15 illustrates the point:
Silver vs. The British Pound 2016
Silver is up 56% vs the British Pound in 2016, while gold is up “only” 40%.
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