Over the past 1.5 years, silver has quietly yet steadily gained momentum. In January 2023, silver was priced at $680 per kilogram, and it has since risen to its current standing at $990 per kilogram. This significant growth highlights the accelerating interest in this undervalued asset. While this growth is noteworthy, industry insiders and market trends suggest the story of silver is far from over.

Artificial Suppression: What the Records Tell Us

Recent investigations into purchasing and delivery records have revealed evidence that silver’s market price is being artificially suppressed. Key findings include:

• Delayed Deliveries: Many silver contracts on major exchanges report unusually long delays in delivery a sign that physical supply is tighter than official narratives suggest.
• Record Purchases: Central banks, industrial buyers, and private investors are accumulating silver at an unprecedented pace, far exceeding annual mining output.
• Inventory Declines: Stockpiles of physical silver in vaults, such as those held by the LBMA and COMEX, have dropped sharply. The data points to a 20% decrease in available reserves within the last 12 months alone.
• Unsettled Futures Contracts: A growing number of futures contracts are being rolled over or settled in cash instead of physical delivery, further indicating a physical shortage of silver.

Why is Silver Underpriced?

Despite these indicators, silver remains undervalued due to systemic factors such as large-scale paper trading and short selling by institutional players. These mechanisms create artificial downward pressure, masking the true value of the metal.

For context:

• The gold-to-silver price ratio currently stands at 80:1, significantly higher than the historical average of 50:1. This disparity highlights silver’s upside potential if it reverts to its mean.
• Industrial demand for silver, driven by its critical role in solar panels, electronics, and electric vehicles, is projected to rise by 15% annually over the next decade. Yet, mining output remains largely stagnant.
• Green Energy Transition: The global push for renewable energy technologies, such as solar power, relies heavily on silver. This transition is expected to increase silver demand by approximately 30% by 2030.
• Monetary Demand: Governments and central banks are beginning to revisit silver’s historical role as a monetary reserve asset, further strengthening its appeal.

Silver: A Strategic Opportunity

Savvy investors recognize that silver offers an exceptional value proposition. It is:

• A Hedge Against Inflation: Precious metals historically preserve purchasing power during times of monetary debasement.
• A Growth Asset: With industrial demand accelerating and supply tightening, silver’s price trajectory is poised for continued upward movement.
• Undervalued Relative to Gold: As the market corrects distortions, silver stands to outperform gold in percentage terms.
• Limited Supply: Unlike other commodities, silver has a finite global supply, with only a fraction recoverable for future use.

Nafzger Invest’s Recommendation

Given the mounting evidence of suppression and strong fundamentals, we believe now is the time to increase exposure to silver. Whether through direct bullion purchases, ETFs, or mining equities, silver presents a unique opportunity for portfolio diversification and growth.

Additionally, we recommend:

• Monitoring Inventory Trends: Keep an eye on physical inventories in major vaults.
• Diversifying with Mining Stocks: Certain silver mining companies are positioned to benefit disproportionately as silver prices rise.
• Exploring Silver-Backed Crypto Assets: Emerging financial products backed by physical silver provide innovative ways to gain exposure.

As always, our team is here to provide guidance tailored to your investment goals. Feel free to reach out with any questions or to discuss strategies for capitalizing on this undervalued asset.