Gold Silver trade updateHello,
So, the case remains unchanged; buy silver when the gold to silver ratio is above 80:1. But, now silver is out-performing gold significantly and the ratio is strongly trending towards a lower gold to silver ratio.
If the previous steep drop is extended from the recent high, then it could imply a G:S ratio of around 45:1, which is;
- right in my buy-zone (that would be a dream come true),
- looking more and more likely.
Luckily, I made a significant silver purchase in late May. I was going to buy gold, but with a gold to silver ratio at around 102:1 then, I just couldn't do it. I had to buy silver instead. I have physical silver ETFs and silver miners.
Actually, HYMC Hycroft Gold also did really well last night +14% (I was watching it spike up at market open). I have a position in HYMC. Because;
- It has almost 20Moz in gold equivalent ounces,
- Seems likely to start mining shortly (6 months or a year maybe commencing heap-leach operations while they seek finance for a processing plant),
- They are extremely under-valued. When I bought in I was only paying $4.40 per gold equivalent ounce,
- They have debt issued, but the bulk falls due 1st Dec 2027 - so there is a bit of time to seek additional funding or re-financing,
- It is in a reliable mining-friendly jurisdiction - Nevada,
- They had some ridiculous drill results recently... over 80,000g/ton Ag (yes only 0.2m of that but still) plus other strikes at 20,000, 15,000, and 10,000g/t Ag.
- The large component of silver was a positive for me, because silver is leverage on gold. I want more silver so I can buy more gold in the future.
For me HYMC was a clear "buy" despite discussing it with someone at Sprott, and they weren't positive about it. I hope it doesn't go up too much, because I see HYMC in the tens of dollars in a couple of years time, not in the single digits.
