Silver Dramatically Underpriced vs. Gold

News of an expanding global trade war has sent all markets into turmoil.

Gold is falling... but nowhere near as much as the general stock market.

On the other hand, silver is getting absolutely slammed right now – down 15% in the past two days. The recent action here is proving to us once again that investing in silver is not necessarily for the faint of heart.

At this moment, silver is trading at $29.98, down a whopping 12.7% for the week, but even more than that, as we just mentioned, if you look at just the last two days.

Meanwhile gold, which is down nearly $100 today alone, is off just 2.0% since last Friday’s close and checks in at $3,034 an ounce as of this Friday late morning recording.

The economically sensitive PGMs are off a good bit here as well. Platinum is down 6.2% to trade at $936, while palladium sees a 5.3% decline to come in at $954.

Finally, copper is also off double digits, down 12.7% on the week – the same decline as silver – to trade at $4.48 a pound.

One of the key metrics we track around here is the gold:silver ratio – or the number of ounces of silver needed to buy one ounce of gold. This ratio has shot up to over 100:1 as of this morning. The last time we saw such a high ratio was in the early days of the Covid panic in 2020.

Silver is always more economically sensitive to gold, so weakness in the midst of a market scare or short-term liquidity situation is not surprising.

Many may view this as a buying opportunity, especially with premiums on silver coins, bars, and rounds still at multi-year lows – and we're certainly seeing a pickup in transaction volume here at Money Metals.

In other news, the People’s Bank of China (PBoC) has been quietly buying absolutely unprecedented amounts of gold as the global financial system is deleveraging.

Money Metals analyst Jan Niewenhuijs has just uncovered both formal and informal sources that indicate the PBoC is currently sitting on more than 5,000 tonnes of monetary gold located in Beijing – that's more than TWICE what has been publicly admitted.

Since the Ukraine war began, China’s central bank has been buying roughly five times more gold than what it actually discloses to the International Monetary Fund (IMF). So, the speed of China's gold accumulation has been accelerating big time.

Sadly, legacy media outlets routinely withhold crucial information like this from investors. It could be laziness or something more sinister. But all the media seem to do is parrot the official data on gold purchases released by monetary authorities. But the reality is that the Chinese central bank is actually buying many multiples of what it’s officially disclosing, and investors should certainly take note.

Combine large purchases by the PBoC and other regional central banks with initiatives to settle trade through non-dollar means, and we should expect the international monetary system to continue shifting towards gold in the years ahead… especially given today’s excessive debt levels, geopolitical tensions, and now what may end up being full-blown trade wars.

For more on this remarkable situation involving China's secret gold buying, visit MoneyMetals.com/news.

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