When it comes to safe havens, most investors think gold is king.
But another metal has taken off in recent days.
Silver gained almost 18% last week during its biggest weekly gain in 40 years. And the precious metal went on another tear Monday, rising around 7% to over $24 an ounce.
The same factors drive both precious metals:
- Aggressive monetary policy that holds down bond yields.
- And a weaker U.S. dollar.
Silver is only getting stronger after the European Union passed a massive $860 billion economic stimulus package earlier this week.
U.S. Congress is set to work on another trillion-dollar stimulus package of its own — on top of the $2.2 trillion package it passed in March.
Citigroup Inc. (NYSE: C) analysts project silver to reach $25 an ounce in the next six to 12 months, with the potential for $30.
Put all of that together and you have a perfect climate to invest in silver.
And I’ve found a great way to do it … which I will get to in just a bit.
One Ratio Tells Silver’s Story
To get an accurate picture of just how strong silver is performing, you need only look at one thing: the gold/silver ratio.
This ratio measures how much silver it would take to buy an ounce of gold. The higher the ratio means gold is expensive and/or silver is cheap.
Vice-versa, when the ratio is low, gold is cheap, and silver is rising in price.
When gold started its run in March 2020, the ratio was 124 — it took 124 ounces of silver to buy one ounce of gold — the highest it’s been in 60 years.
But silver is mounting a serious comeback.
Between June and July, the ratio dropped 12 points to 83. That indicates the price of silver is rising much faster than the price of gold.
Silver Prices Catching Up to Gold
The ratio is at its lowest point since January. What’s more is the ratio is close to dipping below its 200-day moving average of 82. That’s good news for silver prices.
It also means now is a perfect time to capitalize on this trend. Here’s how.
1 ETF to Invest in Silver
Silver prices continue to rally — hitting a six-year high earlier this week — thanks to a weaker dollar.
Rather than sifting through silver miners, an easy way to play this trend is the Aberdeen Standard Silver ETF Trust (NYSE: SIVR). It’s an exchange-traded fund that tracks the physical silver price.
The fund is 100% backed by silver bullion and coins held in a vault on behalf of investors.
SIVR Outperforms Commodities
In the last four weeks, SIVR has gained more than 19% compared to just 4.4% for the S&P 500. Zoom out, and the ETF has jumped 40% in the last 13 weeks compared to 16% for the benchmark.
In my research, I found other comparable ETFs, but none with such strong returns.
It also carries a relatively low expense ratio of 0.3%. (For comparison, another ETF I found has an expense ratio of 0.5%.)
SIVR is a great hedge against market volatility, making it perfect in these uncertain market times.