Silver set to surge after years in the doldrums

Fans of the devil’s metal have faced frustration. But that may be about to change.

silver coins
(Image credit: © Getty Images)

Silver is often described as the “devil’s metal”. It is extremely volatile and has a startling ability to burn holes in investors’ pockets. Never has the latter trait been more evident than in recent months. In March 2011, silver hit $48.60 per ounce, a record peak. Three years ago, it traded at $28.50/oz. Yet now, in real (inflation-adjusted) terms, dollar-priced silver is hardly any higher than it was just after World War I. 

The metal’s underperformance is thrown into sharp relief by the gold/silver ratio. This indicates how many silver ounces equal one gold ounce (there’s more on this topic later on). At present, the ratio shows that silver is looking cheap compared with bullion. However, with silver’s fundamentals both strong and improving, it could soon be re-rated relative to gold. 

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Contributor

David J. Stevenson has a long history of investment analysis, becoming a UK fund manager for Oppenheimer UK back in 1983.

Switching his focus across the English Channel in 1986, he managed European funds over many years for Hill Samuel, Cigna UK and Lloyds Bank subsidiary IAI International.

Sandwiched within those roles was a three-year spell as Head of Research at stockbroker BNP Securities.

David became Associate Editor of MoneyWeek in 2008. In 2012, he took over the reins at The Fleet Street Letter, the UK’s longest-running investment bulletin. And in 2015 he became Investment Director of the Strategic Intelligence UK newsletter.

Eschewing retirement prospects, he once again contributes regularly to MoneyWeek.

Having lived through several stock market booms and busts, David is always alert for financial markets’ capacity to spring ‘surprises’.

Investment style-wise, he prefers value stocks to growth companies and is a confirmed contrarian thinker.