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Silver is catching up fast

Compared to gold, silver is much too cheap. Many investors are now realising this. The catch-up effect should also give a strong boost to silver company shares

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In the first crash sales of the Corona crisis gold held up well and the price of silver fell. The gold-silver price ratio rose to over 120. It's never been this high before. At the end of 2019, it was still at around 90 and thus far from the previous all-time high of a good 100 from the early 1990s. The long-term average - since the 1970s - is around 60. 

The reason for the recent weaker development of the silver price was the fear of market participants that the pausing industrial activities will also push down silver demand. This is likely to happen. But the extent of this should not be too strong. After all, silver is needed industrially in more and more applications - by now already more than 40,000. 

But recently the silver price has again moved up more strongly than the gold price. The ratio has again drifted towards 110. One reason for this is that fears of a slump in industrial demand for silver have diminished due to the global government economic stimulus packages. On the other hand, silver supply is also likely to be negatively affected by the corona crisis. This is because much of the silver does not come from pure silver mines, but as a by-product of mining projects for industrial metals. In some countries, such as Chile, Argentina, South Africa and even Canada, there have already been restrictions on mining. It can therefore be assumed that the silver price will be well supported by the supply-demand ratio as the year progresses.

If the silver price continues to rise, albeit slowly, then there will be more confidence for silver company stocks. These weeks could therefore offer a good entry opportunity. Two silver companies that look good from today's point of view and that should look comparatively good when silver prices rise again are MAG Silver and Endeavour Silver. 

MAG Silver owns the Juanicipio Project in Mexico with its Mexican partner Fresnillo, one of the largest silver producers in the world: https://www.commodity-tv.com/play/mag-silver-investor-presentation-at-pdac-2020/. The silver mine is practically established there, and production is expected to start up economically soon.

Endeavour Silver already produces silver - also in Mexico. Three mines ensure silver production: https://www.commodity-tv.com/play/endeavour-silver-preparations-for-corona-and-update-on-terronera-development/. Further projects in Mexico and Chile are being explored.

The latest company information and press releases from MAG Silver (https://www.resource-capital.ch/en/companies/mag-silver-corp/) and Endeavour Silver (https://www.resource-capital.ch/en/companies/endeavour-silver-corp/).

In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.

Disclaimer: The information provided does not represent any form of recommendation or advice. Express reference is made to the risks in securities trading. No liability can be accepted for any damage arising from the use of this blog. I would like to point out that shares and especially warrant investments are always associated with risk. The total loss of the invested capital cannot be excluded. All information and sources are carefully researched. However, no guarantee is given for the correctness of all contents. Despite the greatest care, I expressly reserve the right to make errors, especially with regard to figures and prices. The information contained herein is taken from sources believed to be reliable, but in no way claims to be accurate or complete. Due to court decisions, the contents of linked external sites are also co-responsible (e.g. Landgericht Hamburg, in the decision of 12.05.1998 - 312 O 85/98), as long as there is no explicit dissociation from them. Despite careful control of the content, I do not assume liability for the content of linked external pages. The respective operators are exclusively responsible for their content. The disclaimer of Swiss Resource Capital AG also 
applies: https://www.resource-capital.ch/en/disclaimer/ 

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Always up to date with the newsletter from SRC

Swiss Resource Capital AG will use the information you provide in this form to keep in touch with you and to provide you with updates and marketing information. To receive our news, you still have to give us permission to send you E-Mails below.

You can change your mind at any time by clicking on the Unsubscribe link, which you can find in the footer of every email you receive from us, or by contacting us at [email protected] We will treat your information with care and respect. For more information about our privacy practices, visit our website. By clicking below, you agree that we may process your information in accordance with these Terms.

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