Silver Is Knockin’ on Breakout’s Door

Hey There Income Hunters,

I had Bob Dylan’s “Knockin on Heaven’s Door” in my head all day, so I had to find a subject line to fit it.

Silver was the perfect one, actually — up almost 3% yesterday.

I honestly think gold and silver will become the most sought-after asset class in the months ahead. I’ll give silver the nod, though, as history shows it outperforms in the early stages and gold catches up later on.

Check out this gold/silver spread history …

OK, stay with me here, I am going to give you a scenario where silver goes to $50 this year and even further in 2022

Plus I have a silver miners ETF that will give you leverage and diversification PLUS outperform the metal by multiples as silver rallies!

Soaring Silver

At the end of the housing bubble silver soared and outperformed gold by $58 dollar as the spread went from $88 to $30 …

Then gold caught up as silver stayed in a bear market while gold climbed higher until it soared in 2020 …

That spread went all the way to $125.

Now, it’s silver’s turn again and that makes sense as we head into the summer and Biden’s infrastructure spending bill moves forward.

The spending bill will give silver a serious boost — given silver’s numerous industrial uses — which could take the gold/silver spread back to $30 lows …

One Step at a Time

First we need physical silver to close above $26.63 for two days to confirm a breakout. That would break the string of lower highs since a February high of $28.32 …

And it would signal that silver is back in an uptrend

I am confident we will get those closes, and when we do, we can expect a “silver bullet express” to reach the previous high just above $30.

Once this first step is completed, silver will be off to the races.

I think 2022 will be the year inflation takes hold and there is more demand for silver as an industrial metal.

When you consider all the infrastructure building that will continue as China gets rolling its Belt and Road Initiative, silver will be in demand for decades …

China is connecting 68 countries that account for 65% of the world’s population — plus, the digital yuan will instantaneously send funds to builders, developers and contractors. The project is scheduled to go on for 25 years.

I believe we’ll see $50 silver 2022 as it becomes a much more important industrial metal in a new green world. And if it takes out $50, who knows how high it can go!

Miner Assistance

OK, here is the silver miner I have my eye one.

Prime Junior Silver Miners ETF (Ticker: SILJ)

This is the best way to play an extended rally in silver …

You don’t have to worry about picking the wrong company and there are liquid options …

For this play, I like buying longer-term calls — maybe a year out — and then picking spots to sell shorter term calls against it. This way you can pick up income along the way and before you know it you own the long call for free …

SILJ has over $800 million in assets under management. The ETF product trades an average of more than 1.83 million shares daily and charges .69% management fee …

Bring it Home

I am not sure if the magnitude of change that’s coming has sunk in yet …

Raw materials and industrial metals are an ideal way to play for it.

Wait for the breakout in silver and get aggressive!

And as always …

Live and Trade With Passion My Friends, 


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