It is well known that Gold and Silver are highly correlated with each other. Sometimes Gold leads and Silver follows; other times it is the opposite. Gold has performed exceptionally well over the last five years, and its outperformance has become more pronounced this year. The chart above illustrates the ratio between these two metals. When Silver is outperforming Gold, the chart goes up. As you can see, it has been going down.
This was primarily due to geopolitical tensions and economic uncertainty. Gold is perceived as a better hedge when the world is in distress.
We are invested in both, but we believe that going forward, Silver will start to catch up to Gold, which means it would be prudent to overweigh Silver. The rotation between the two metals is well known and stable. We think it is time to shine for Silver.