Rapster what is it that particularly makes you think that there might be a silver squeeze?

I've been following silver loosely for a while and it feels like people having been calling for a squeeze for decades.

The SLV ETF, has the current conditions:

1) very large spread (skew) between implied volatility of 2 month 25-delta put options less the implied of 2 month 25-delta call options. = 1.3

2) 30 day ATM Put implied volatility / Mean (10d, 20d, 30d Relative volatility) - This is the percentage spread between implied volatility of put options and Realized volatility. Currently = +38%

It means there is excessive crowding on the short side, which needs to be re-balanced in the short term.....1-3 weeks. This is based on 42macro data, calculated on a daily basis. I don't know about the call for squeezes over the years, but what I do know is this week is the first time it has triggered this signal since I began subscribing to 42Macro.

Lets see how it runs over the nextweek....

I am also intrigued by silver @Hands - however I only have limited exposure to silver via ownership of South32 (S32) shares. South32 own the Cannington mine in North West Queensland, one of the world's largest producers of silver and lead (and Cannington also produces zinc). See here: https://www.south32.net/our-business/australia/cannington

I do think that gold and silver have decoupled now. There used to be like a tether that dragged silver up when gold went up, and dragged silver down when the gold price fell for decent periods of time, but while they still often do move up and down at the same time, the ratio has broken down in recent years, so the moves that silver makes seem to have less to do with gold and the "store of wealth" argument, and more to do with silver's industrial uses. See here: https://www.marketreview.com/silver-as-store-of-wealth/

Source: Statista: 2020 Silver Demand by sector/purpose: https://www.statista.com/statistics/253345/global-silver-demand-by-purpose/

Source: Statista: 2020 Gold Demand by sector: https://www.statista.com/statistics/299609/gold-demand-by-industry-sector-share/

Gold has far less industrial uses than silver.

That's based on 2020 but I don't think the uses for gold and silver have changed materially since then.

So my observations are that the drivers behind the silver price have changed by more than the drivers behind the gold price have over recent decades, and that has caused a sort-of uncoupling of the two prices, which used to have a fairly reliable relationship to each other, but now - not so much.

Source: https://www.bullionbypost.com/price-ratio/gold/silver/20year/

In light of that, I don't think investing in silver has the same arguments as investing in gold, and I mean that in terms of both owning physical gold/silver and/or having exposure to one/both of them via ETFs and/or companies that own deposits and produce and sell those metals (i.e. buying shares in gold and/or silver producing companies).

I'm not saying one is better than the other, just that there are different reasons to invest in the two precious metals, and a different set of reasons again for investing in platinum or palladium. And different again for diamonds. All have industrial uses, but I would imagine that none are held purely for investment (or "speculative" purposes) as much as gold is.

Here are the latest charts for both gold and silver in US$ for the past 5 years:

Source: https://goldsilver.com/price-charts/

Gold has clearly outperformed over the past 5 years, as it started at a lower point and finished at a higher point relative to silver. Gold has also exhibited less price volatility than silver over the 5 years.

But silver has certainly outperformed over some other timeframes. I think the charts we were looking at over in the gold thread only went up to the end of 2020, or thereabouts, because they were from an article published at that time, and the charts above are current as of today (Wednesday 11th May 2022).

Funny I mentioned Platinum and Palladium in my previous post in this thread along with Silver, Gold and Diamonds (as all having different demand drivers and reasons for investing in them) - then I read Marcus Padley's EOD (end-of-day) email this evening and he's listed Galileo Mining (ASX:GAL) as his "Speculative Stock of the Day". Have a look at this for a bonza daily move by a speculative base metals explorer:

I used to hold GAL shares back when I held IGO shares back before IGO sold their 30% of the Tropicana Gold Mine to Regis (RRL) and moved into lithium. I held GAL because they owned some tenements that were either adjoining or else in close proximity to IGO's tenements around IGO's Nova Nickel/Copper mine and the Nova-Bollinger mineralised system and also close to the Tropicana gold mine (which are all near Norseman in WA).  My thoughts at the time were that there was a reasonable chance that GAL would find something of value via their drilling and/or IGO would buy them.  However I accepted that Galileo were highly speculative - being explorers with no income other than what they could get via share placements and other CRs.

They closed at 20c/share yesterday, and at 63.5c/share today. +217.5% in a day is not bad at all. They've certainly found something, but the headline news is that it's mostly Palladium (Pd) and Platinum (Pt), plus some copper (Cu), Nickel (Ni) and some traces of gold (Au). The question of course is how big is the deposit? They've likely just found the edge of it, but there's a fair bit of that already priced in based on their share price more than tripling today.

For every one of those explorers who have a find like this there are probably another 20 or 30 that drift away to zero eventually.

And No, I'm unfortunately not currently holding GAL shares...

D'oh!!

And I won't be jumping on them after that move.

Today's announcement: (11-May-2022): GAL-Major-Palladium-Platinum-Discovery-at-Norseman.PDF