Analyst Outlines how Silver is a Seriously Undervalued Asset Right now

JP Buntinx
April 4, 2020

There are very interesting times for most financial markets. In terms of both gold and silver, production is slowly grinding to a halt. This leads some industry experts to believe that silver is a highly undervalued asset, which is pretty interesting in its own regard.

The Short-term Future of Gold and Silver

In theory, nothing prevents both gold and silver prices to skyrocket in the near future. A lot of aspects of the precious metal industry are in favor of a price surge as of right now. Just because of these developments taking place doesn’t necessarily mean that will be the outcome whatsoever. Markets remain very finicky right now, and there is little to no immediate improvement in sight.

Factors working in favor of both gold and silver include the coronavirus pandemic and how various mines have been shut down. The lower production of precious metals is usually bullish for the market price. At the same time, global demand for both precious metals has decreased significantly, Because of this factor, it seems unlikely that anything major will happen in the short-term.

Another beneficial development is how the silver and gold price volatility has almost died down completely. That in itself is pretty interesting to keep an eye on. The negative pressure has been subdued for the most part, but there is no real bullish surge either.  For long-term investors, that may not necessarily be something to be concerned about right now.

Everything comes down to how things will evolve over the coming months. If the demand will pick up again, and the supply remains very limited, things may begin to shift in a few months from now. Until that happens, a bit of a status quo seems to be the most plausible outcome. Those looking for a quick profit may want to look at other markets, however.

Is Silver Really Undervalued?

One interesting comment has been shared by analyst Steve St. Angelo. He expects things to turn around for all precious metals, yet specifically hints at silver as a go-to asset. He expects investors will prioritize financial security over anything else while the coronavirus crisis remains in place. 

When that happens, it remains to be seen how much gold and silver there is to go around. With current prices, the easily accessible reserves can be scooped up in a heartbeat, so to speak. 

St. Angelo expects a “financial storm” to take place throughout Q2 and Q3 of 2020. Such a situation would certainly be interesting to witness, albeit no one really knows if and when that will happen exactly. Only time will tell if more investors will flock to precious metals as a result.

Considering how the silver-to-gold ratio hit 100 in favor of gold recently, one has to wonder whether silver is effectively an undervalued commodity. St. Angelo sees a bright future for this precious metal once investor interest picks up again. Gold is often considered to be a store of value, but silver may attain that level as well at some point in the future. 

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