Silver Price: As Crypto Falls and Inflation Rises, Silver is a Great Hedge – Coverage on Golden Tag Resources (TSXV: GOG)

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Published on: May 28, 2021
Author: Caroline Kong

As Crypto Tumbles, Should Investors Return to Gold and Silver?

Crypto markets have been getting a lot of bad press. In just over a month, Bitcoin has shed close to 50% of its value, coming down from a high of $64,829 to reach $35,990 Friday, leaving investors wondering just how much further it will fall.

While crypto continues to make headlines for all the wrong reasons, another market getting a lot of attention for the right reasons is gold.

For the first time this year, gold prices have pushed past $1,900, up 6.85% from April.

But, according to analysts, investors looking towards precious metals should be paying more attention to silver.

In a report published by Metal Focus, silver prices are expected to outperform gold throughout 2021.

Silver Price Could Reach $50

It’s been a bumpy ride, and silver has had its fair share of ups and downs this year. However, over the past 60 days, the price of silver has been relatively stable, trading between $24 and $28 and trending upwards.

Two separate reports, one from the Bank of America and another from Bloomberg, predict silver prices could reach $50 an ounce this year. While that would represent close to a 78% upside from current silver prices, it would still be off reaching the inflation-adjusted highs of 2011 and only just surpassing its all-time high price of $48.

From both a technical and fundamental standpoint, analysts are bullish on silver prices for 2021. Silver prices have been steadily treading up as investors move more funds into the white metal in the wake of low interest rates and inflation fears, while industrial demand for silver continues to climb as global economic recovery heats up.

Old-timers and industries are not the only ones driving up the price of silver. Investors wary of highly volatile crypto markets have also been shifting to silver in the face of currency debasement concerns.

Factors Behind Gold and Silver Price Rise

The Fall of Cryptocurrency

It has only been a month since Bitcoin reached its all-time high, and crypto investors worldwide celebrated their good fortune while patting each other (virtually) on the back. Since then, Bitcoin prices, and the broader crypto market, have plummeted. Bitcoin, Ethereum, Ripple, and Dogecoin have all lost over 40% of recent gains.

While this has been bad news for cryptocurrency investors, gold and silver bulls have been feeling good.

Inflation

Before investors were turning to gold and silver to escape cryptocurrency volatility, they bought up them as an inflation hedge.

As global economies emerge from Covid-19 slowdowns, ongoing fiscal and monetary stimulus will continue to support economic growth and, by extension, industrial commodities. At the same time, low interest rates and inflationary pressure will further encourage investment in gold and silver, which is a good sign for price rise.

Recent analysts’ reports have pointed out that demand for silver remains robust. In fact, it has been growing, thanks in part to the increasing demand for silver in the development of green energy technologies that rely on the precious metal.

Global holdings in silver-backed exchange-traded products have been close to record levels, and physical bullion demand reached new all-time highs in Q1 of 2021, up 43% from 2020.

About Golden Tag Resources Ltd. (TSXV: GOG)

Golden Tag Resources Ltd. (TSXV: GOG) is a junior exploration company exploring for high-grade silver deposits. The Company holds a 100% interest, subject to a 2% NSR, in the San Diego property in Durango State, Mexico. The San Diego property is located within the prolific Velardeña Mining District, the site of several mines having produced silver, zinc, lead, and gold over the past century.

The Project currently hosts over 230 million AgEq ounces of Indicated + Inferred NI 43-101 compliant resources. The Company also believes that there is an additional 20 to 50 million tonnes of potential addition grading 100 to 150 g/tAg Eq (65 to 240 million ounces). Golden Tag has no debt and cash balances of approximately $9 million.

On Thursday, the Company announced that they had discovered a new zone of epithermal mineralization approximately 68 metres vertically below their 100% wholly-owned San Diego Project.

Hole 21-57 yielded the discovery of 892.25 g/t Ag.Eq over 10.0 m from 73.0 to 83.0 m and 115.33 g/t Ag.Eq over 5.54 m from 87.16 to 92.70 m.

Commenting on the discovery Golden Tag President and CEO Greg McKenzie said: “We were pleasantly surprised to have discovered this new mineralization, located at the top of hole 21-57 approximately 500 m above the planned target area. This is a significant discovery because it opens up the potential for epithermal type mineralization on the San Diego Project, above and beyond the broad skarn mineralization typically encountered. Our next phase of drilling will attempt to follow up and expand upon this discovery.”

This new mineralization zone could be related to two other previously unreported mineralization zones east and northeast of hole 21-57.

So far, a total of 4,510 metres of diamond drilling has been completed covering eight holes, and over 3,800 samples have been submitted to ASL Geochemistry for analysis. In previously reported results, hole 21-54 intersected 286.02 g/t Ag.Eq over 18.43 m, within a broader skarn zone of 91.98 g/t Ag.Eq over 99.53 m.

Cryptocurrency Gold Investment Precious Metals Silver