Gold Digger: Silver could outperform gold in the next precious metals rally
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Metals Focus says silver prices could be about to rocket higher relative to gold, which also has very good fundamentals.
The often-mentioned ‘gold-silver ratio’ is simply the amount of silver it takes to purchase one ounce of gold.
The has largely held in the low 70s this month, close to four-year lows.
That’s 70 ounces of silver for every ounce of gold, which is pretty close to the 20 year average of 60:1.
“As investors become increasingly accustomed to a gold:silver ratio in the low 70s, there is plenty of room for a further contraction toward the low 60s, as we progress into 2021,” Metals Focus writes.
And unlike gold, silver is currently trading well below its all-time high in 2011 of over $50, Metals Focus says.
“Once the expected rally in the precious metals complex resumes, this may well encourage aggressive tactical buying from those who believe silver remains undervalued relative to gold.”
Here’s how ASX-listed gold stocks performed January 25 – January 29 [intraday].
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:
This week’s top mover is Hawkstone Mining (ASX:HWK) but lithium – not gold – was the catalyst.
Early stage testing at Hawkstone’s Big Sandy project in the US has recovered 90 per cent lithium from ore. Which is pretty good.
Hawkstone says testwork partner Hazen Research is on track to produce battery-grade Li2CO3 (99.5 per cent lithium carbonate) by the end of February 2021.
The gold-lithium stock has been on a red hot run, up ~440 per cent since the start of the year.
First Au (ASX:FAU) climbed on strong results from drilling at its Gimlet gold project near Kalgoorlie, WA. Highlights included 6m at 6g/t and 1m at 30g/t.
Broad high grade gold from Torian Resources (ASX:TNR) Mt Stirling project confirms “that it is a much larger gold system than originally thought” the company says.
And Kaiser Reef (ASX:KAU) has re-listed on the ASX as a gold producer following the completion of an oversubscribed $7.5m capital raising.
Kaiser poured first gold following the acquisition of the operating A1 mine, Maldon processing plant and exploration project in Victoria.
A1 has historical production of ~500,000oz of gold since 1861, while the Maldon gold field produced 1.74 million oz of gold at an average grade of 28 grams per tonne.