Silver is a great risk-reward trade

SILVER, better known as gold on steroids due to its extreme volatility, has historically performed better under a new secular precious metal uptrend. Silver follows a similar eight-year cycle pattern to gold where a cyclical low is formed in between every eight years, and then a secular bull market takes over.

Our study shows two interesting points for the cyclical low: the US$13.63 December 2015 low and a more recent low in July 2017 at US$13.91. If the eight-year cycle were to hold, we should expect the US$13.91 July 2017 low and alternatively the US$13.63 December 2015 low to keep a floor on price.

Another indicator to trade silver is the gold/silver ratio. It measures how many ounces of silver one ounce of gold buys. For example, the current gold/silver ratio of 75 tells us one ounce of gold can be traded for 75 ounces of silver.