Is Gold Still A Hedge At $3K?

Dear Reader,

Well, it’s happened. At 4 am Friday morning, Gold hit an all-time high of $3,017 before pulling back a bit as the North American markets opened. 

Who knows, by the time you read this, it could have bounced and achieved new highs.

This isn't news to us, of course. We’ve been watching the runup for weeks now as the price has been hovering close to the milestone but not quite getting there. 

The question is: Now what?

$4000 gold? $5000 gold?

Well, investors who stubbornly cling to the antiquated rule of ‘buy low sell high’, will probably — and I know this may offend some — start considering slowing their exposure to gold. 

What Are Gold Investors Expecting To Happen Next?

Insane, I know. But at all-time highs, the rush to buy seems to smell like just a bit of irrational exuberance.

Last time gold spiked this dramatically was more than 40 years ago. Prices ended up falling by 60% and staying there for almost 20 years, so nothing is certain, even when talking about the vaunted yellow metal.

Boil all that down and the conclusion is simple, if not self-apparent: Tripling and quadrupling down now may not be the best course, especially when there’s an excellent gold alternative out there that’s priced far more reasonably. 

I’m talking about silver, and unlike gold, which has gone from a traditional hedge investment to a speculator’s playground in the space of just 16 months, silver prices remain stable and boring — just as a hedge should be. 

But here’s the thing. Silver is anything but boring. 

Right now, the biggest consumer of silver is the tech industry, which gobbles up almost 60% of annual production for use in things like phones, tablets, laptops, batteries, solar cells, semi conductors, and a list of other products and components that run the modern world.

At $34/ounce, silver is far too cheap to recover from these same devices and components when they’re discarded, so almost all of it goes straight into the land fills, never to shine in the sunlight again. 

Too Cheap To Recycle, $2.4B Worth Of Silver Returns To The Ground Every Year

That makes silver a vanishing resource, with 700 million ounces of the metal pulled permanently from circulation just in 2024. 

Solar panels alone consumed more silver than coins and bullion put together.

It's paradoxical, because while reserves shrink, silver prices, which are at historic lows in proportion to gold (around 90 to 1 vs  40-60 to 1 through most of modern history), remain essentially flat. 

Accounting for inflation, silver’s price has barely changed since the turn of the 21st century, with the two notable exceptions coming in the post recession years and immediately following covid. 

So yes, gold remains in the spotlight, as it has since the dawn of time. Meanwhile, silver is working behind the scenes as one of the most important technology metals in existence.

The Drunken Feast Can't Last Forever

Very soon, the market will get wise to this. There’s now way around it. Silver producers are already scrambling to find new deposits just to feed demand. 

Silver will have no choice but to move up, significantly, to restore anything resembling a normal price ratio with gold. Shrinking reserves and exploding demand will only compound this effect.

That makes silver, not gold, the forward-looking strategy investors should target right now. 

Which leaves another question: With all the choices out there, how exactly do you best leverage this approaching economic tidal wave to your maximum benefit?

There are lots of miners and explorers out there both big and small, but there’s one field that’s highly prospective and almost completely overlooked, just like the metal itself. 

It's The 21st Century. Mining is out. Extraction Is In

It’s known as silver extraction technology, or more informally, urban mining. And with so much silver and other valuable elements floating around in used and discarded electronic products, this emerging sector might be the most promising within the entire space. 

Millions of tons of the stuff just sitting there for anybody who can figure out how to get to it, economically. 

Any investor currently thinking about gold, or thinking about more gold, or wallowing in self-pity for missing the gold train altogether would be well-advised to look into silver. Because everything that’s happened to gold in the last 18-24 months is set to repeat itself with gold's little brother. 

Get the full story on Urban Mining and the exclusive access one company has to over 250 million ounces.