"SILVER" and "US Dow Index" Earnings Comparison

     In the logarithmic scaled chart starting from 1983 below, the blue silver curve in the left column is compared with the black Dow Jones Index curve in the right column. There was a 10-fold difference in scale between gold and the Dow Jones Index; if you pay attention to the left and right columns of the chart, you will see that there is also a 1000-fold difference in scale between silver and the Dow Jones Index.

     At the beginning of 1983, silver had a 12.88 times higher return than the Dow Index. Then in February 1996, their returns equalized and until January 2006, the US Dow Index surpassed silver in terms of return.

     Then, as of April 2001, the return of silver rose to 4.10 times higher than the Dow Index return. Today -pay attention to the last part of the chart- the black Dow Index curve is 34%, i.e. 1.34 times, above the blue silver curve.

     On my previous post I showed that silver could rise to $85 by the end of 2027. Now, according to this chart, it could be said that, if the Dow Jones Index falls to 36,500 and the return of silver first catches up the Dow and then exceeds it by 1.5 times, the ounce price of silver could reach $55.

     Let this be our second prediction.

     My third prediction is on the following chart. This is the Silver/Dow Index Ratio Chart. In circles 1-3-5, silver and Dow Index returns were equal. In circle 2 dated May 2001, the Dow's return was 2.59 times higher than silver. In circle 4 dated April 2011, the silver return was 4.10 times higher than Dow. Now, it's time to make my final prediction that is shown as in circles 6 and 7.

     According to my second prediction, if the Silver/Dow Index Ratio become 1.5-fold in favor of silver, this could push the silver price to $55.

     Similarly, if the Dow Jones Index remained at 45,000 and the Silver/Dow Index Ratio rose to 2.00, then the silver price could reach $90.

     These are reasonable, not exaggeratted targets. What do you think?

"GOLD" and "SILVER" Price Predictions

     In this chart the trend lines are extended to January 2028. A sixth-degree polynomial is used here. If such a realization occurs, this chart shows us that gold could rise to $5,750 and silver to $75 by the end of 2027-early 2028. Of course, the trend could follow a different path, and the process could present a very different picture. Here, we are only making a mathematical inference based on the data.

     Mathematics is infallible, but the process may necessitate different mathematics.

     Indeed, the chart below shows us such a possibility. You must have noticed the upward trend in the Gold/Silver Ratio Chart created from the beginning of 1983 to the present. While the midline of the Gold/Silver Ratio was 61 at the beginning of 1983, today this midline seems to have risen to 75. In other words, in terms of averages, gold is approximately 23% more valuable than silver compared to 42 years ago.

     I mentioned it in one of my previous publications. Now it is time to repeat it: The date when the Gold/Silver Ratio was first determined coincides with the Roman Empire. At that time, the gold/silver ratio was 12:1. In the early twentieth century, it rose to 40:1. Later, we see that at first 60:1, and today 75:1 are valid. I expect this ratio to reach its peak of 100:1 in the coming decades. Of course, this is not something that can happen overnight, it is a prediction that can happen around 2075.

"GOLD" or "SILVER"? Which One Provides More Profit and When?

      The chart below shows the course of gold and silver valuations since the beginning of 2020. In the chart, black represents gold and blue represents silver.

     The section marked with the number 1 indicates the bottom level in September 2022 for both gold and silver, and the section marked with the number 2 indicates the peak valure in May 2024 for both.

     In the section from 1 to 2, gold increased by 51.77%, while silver gained 85.18% in the same period. In other words, the return of silver was well above gold.

     In the section from 2 to 3, that is, from the peak in May 2024 to the present, gold increased by 19.98%, while the increase rate of silver remained at 1.31%. Therefore, the difference between gold and silver in terms of return is closing.

     Now I will give you a very important tip. Note that there is a 100-fold difference between the scaling in the left column showing the silver price and the scaling in the right column showing the gold price. When the black and blue curves in the graph approach each other as if they are about to intersect, that is, when the gold price increases to around 100 times the silver price (sometimes this remains at 95 times, sometimes it can reach 115 times), in such cases, silver usually makes a reaction jump in a short time and the blue curve widens difference with the black curve again.

     We can also follow this situation in a much wider time range in the logarithmic scaled graph created since the beginning of 1990. As you can see, the blue silver curve is generally above the black gold curve. However, in some cases, these two curves come close to each other. In the period following this convergence, silver performs better than gold.

     Of course, there is an easier way to follow this correlation. The Gold/Silver Ratio chart provides us this opportunity.

     If you recall from the previous chart, silver had widened the gap between gold and silver in April 2011 and reached its peak value. Since that date, gold has gained more. This situation is shown with the orange arrow.

     It is possible to roughly divide the chart into three. When the Gold/Silver Ratio is between 30-60 gold and when it is between 75-115 silver are more advantageous in terms of performance. Today, we are at 89.26.

Gold Pricing in Terms of Dollar Emission and US Debt - February 2025

      The printed US dollar, that is, the amount of emission, and the US National Debt have a direct impact on gold pricing.

     Dollar emission, that is, the amount of dollars printed, peaked at $21.72 trillion in April 2022. When the process that started with the pandemic caused high inflation, the FED raised interest rates and withdrew $1 trillion of the dollar stock spread around the world. And in October 2023, dollar emission decreased to $20.69 trillion.

     After this date, the emission volume started to increase again and now it has almost returned to the amount of emission in April 2022. The emission amount at the end of December 2024 was $21.53 trillion.

     There is a direct relationship between dollar emission and gold price. Regardless of market movements, when emission increases, the gold price - on average - increases at approximately the same rates.

      Especially if market movements also support the gold price, the ratio of gold to dollar emission also increases. The graphical examination of this ratio is extremely important in terms of estimating the gold price.

     As you can see, today the gold price is at the level of 0.136 of the US emission volume. When gold increases, this ratio also increases. In this parallel, I think that the 0.200 level seen in September 2011 will be seen again.

     In fact, when evaluated for a later date, an increase to the range of 0.300 to 0.400 may be experienced. The first graph showed the period after 2000. The starting date of this graph is 1978.

     Another important indicator for gold prices is the level of the US National Debt. Just like the emission volume, this also constitutes an important data package. Today, the US national debt is at the level of 36.22 trillion dollars, a figure much higher than the dollar emission.

     There is a similar relationship between the US National Debt and the gold price as the emission amount, but in some periods one can be at higher levels, and in some periods the other can be at higher levels.

     You can follow the course of the last fifty-five years from the table. Pay attention to the Gold/Debt Ratio in the last column. The bottom level was reached in 1980 at 1.32. In other words, the price of gold climbed to its peak against the US National Debt on this date. In 2000, we see that it reached 20.40, meaning that gold was a very cheap commodity at the beginning of the new millennium.

     An increase in the Gold/Debt Ratio means that the price of gold is getting cheaper, and a decrease means that it is getting more expensive. Today, we are at 12.45. It is certain that gold has risen compared to two years ago, but the Gold/Debt Ratio still maintains its high level. Therefore, it can be said that there is still a wide area ahead of us.

     In this context, I will finish by making additional predictions for the end of 2027. You can see these in the last three lines.

     If the ratio of gold to the US national debt falls to 10% by the end of 2027, this will mean a price of at least $5,270 for the price of gold. Especially if this rate drops to 7.5%, the ounce price of gold will rise to 7,027, and if the rate drops to 5%, the ounce price of gold will rise to 10,540 dollars.

     These figures are more than just predictions, they are conditional propositions. Just like "if this happens, this will be the result".

     Stay tuned. Best wishes...

US Inflation Adjusted Gold Chart - February 2025

      In the logarithmic scaled and US inflation corrected chart below, starting from 1972, pay attention to the double peaks dated January 1980 and September 2011.

     After the movement in the last month and a half, we see that this double peak has finally been definitely exceeded and the level of $2,930 per ounce has been reached. The first target after this will be $3,000.

     Our second chart is the large-scale version of the previous chart, not logarithmically scaled and created from 2006 to the present.

     After the last rise, we can see how the previous peaks were exceeded much more clearly from here. Just like the bottom points from $1,398 to $1,720 were formed higher, I expect gold price to continue climbing to a new peak higher - before a respitation. In this context, I believe that the levels of 3,300 can easily be seen in the gold price in the period until mid-2025.

Gold/Dow Jones Ratio (Gold's Real Value Indicator)

     In the logarithmic scaled graph below, the price changes of the Dow Jones Index and gold metal from the beginning of 1972 to the present time can be monitored simultaneously. The black curve shows the ounce price of gold, and the blue curve shows the Dow Jones Index.

     While gold and Dow Jones returns were equal to each other in the 2nd, 4th and 6th green circles, gold had a higher return in the 1st and 5th circles and the Dow Jones Index had a higher return in the 3rd circle.

     The first circle shows the situation in September 1980. Here, the return of gold had exceeded the return of the Dow by 6.80 times. In the third circle, in January 2000, the return of the Dow exceeded the return of gold by 4.15 times. In the fifth circle, we see that gold once again made a higher return and exceeded the Dow Jones return by 85%, that is, by 1.85 times.

     After the 6th circle, where the Dow Index and gold ore returns were equalized, the Dow Jones Index managed to provide more returns than gold. Today, the difference between them is 1.53 times in favor of the Dow Jones Index. In January, there was a difference of 1.62 times. In other words, gold is on its way to catching up with the Dow Jones Index in terms of return.

     I would like to make my first prediction about the future price of the gold on the graph above. I think that the return of black painted gold curve will first catch up the return of the blue painted Dow Jones Index curve until 2027, and then exceed it by at least 1.5 times. In this context, I expect the Dow Jones Index to fall to levels of 36 thousand and the price of gold to rise to around $5,500.

     Pay attention to the gold scaling in the left column and the Dow Index scaling in the right column. There is a 10-fold difference between them.

     Now it is time for our unique and beautiful graph, which I love very much. Here we have compared the returns of gold and Dow Jones Index to each other. The circles marked 1-7 are in harmony with the previous chart.

     Circles numbered 2-4-5-6 show the periods when Dow and gold returns were equal or close to each other. In circle number 1, gold had higher returns, while in circles number 3 and 7, Dow Index had higher returns.

     Going below the zero line shown in orange color means that Dow Jones Index return is higher. Going above it shows that gold return is higher.

     I am making my second prediction in the last chart below which I extended to 2027.

     In my first prediction, I expressed my expectation that the Gold/Dow Ratio would rise to 1.50 and the gold price would reach $5,500 within this scope. My second prediction is that, for a slightly more distant future, gold return could exceed Dow Jones Index return by 2.0 times. If this happens, the Dow Jones Index will be around $45,000, while the price of an ounce of gold could reach $9,000.

What Does Reserve and Mineral Resource Mean? How Much Gold Is Left in the World?

     The first section of the table below shows the amount of gold above ground, and the lower section shows the stock of gold underground. The cube next to the table explains this situation.

     The demand for gold has increased in every field from 2010 to 2024 but when we look at their proportional distribution, we see that the share in the jewelry sector decreased from 50% to 45%, while the share in the investment sector increased from 18.5% to 22.5%.

     Pay attention to the lower section. The gold source referred as reserves and resource are stated separately.

     Reserves indicate that the mines related to the detected ore are being operated or their feasibility is completed and they are ready to be operated. In this respect, gold reserves is around 55,000 tons.

     Resource, on the other hand, is a sum of the total amount of the reserves and the estimated amount of gold in mining areas where the feasibility is not yet completed or is very difficult to extract under today's conditions or where extraction will cause high costs. This amount is totally around 132,000 tons at the end of 2024.

     Just as the reserves increased from 51,000 to 55,000 despite all the gold mined from 2010 to 2024, both reserves and mineral resources may continue to increase in the coming years with new discoveries and the openings of new mining areas. However, when we evaluate today's amounts, we can say that there is 15 to 35 years of gold left underground.

     This gold will also eventually be mined but with higher costs. This fact will be another reason for supporting the rise of the gold price.

The Present and Future of Gold - February 2025

     Gold has been the most fundamental investment tool that protects savings against inflation since the beginning of history. And it fulfills this function also against US inflation.

     And in some periods, it can surpass this function of protecting savings and become a real investment object, that is, it can play to the top in terms of return among all other investment tools.

     We last experienced this situation in the ten-year period between 2001-2011. During this period, gold increased tenfold from approximately 200 to 2000. Another ten-year period in which a horizontal course prevailed passed. And now, let's see how many years, we have entered a new upward trend.

     Our chart is on a logarithmic scale. You should use the logarithmic scale when making such long-term examinations.

     Now let's continue with a table. With the last increase, the total market value of physical gold has exceeded 20 trillion dollars. Bitcoin's value is at $1.92 trillion, which is 9.4% of gold. When we look at the total market value of all currencies, we come across a value of $3.19 trillion, which is 15.66% of gold.

     And as you know, there is a lot of paper gold in the form of ETCs, ETFs, gold certificates, gold accounts, gold funds, futures, and options. In January, the ratio of this paper gold to physical gold was 126.77 to 1. In other words, there were 126.77 ounces of paper gold in the investment world for one ounce of physical gold. In February, this ratio increased by 1.14% to 128.22 to 1.

     When we add this amount held as paper gold in accounts, the total amount of money invested in gold in the world reaches $2.6 quadrillion. When we look at it this way, the total value of Bitcoin is 7/10,000 of gold and the total value of coins is 1.2/1,000 of gold. These are negligible amounts compared to the huge size of gold investment. In other words, calling Bitcoin virtual gold is not compatible with reality. Virtual gold is not Bitcoin, but gold itself, held in paper form.

     Bitcoin and other coins are something else. We will discuss this in our coin broadcast in the coming days.

€RPV$ and €MPV$ - Comparison of the Euro's Real Parity Value and the Market Parity Value against the Dollar

      Let me start by saying at the beginning, what I will say at the end. When it comes to the currencies of countries with developed economies such as Europe and others, it is seen that RPV$ and MPV$, that is, the Real Parity Value Against the Dollar and the Market Parity Value are in great harmony. In other words, sometimes one goes up, sometimes the other goes up, but the difference never gets too big.

     This situation can be clearly observed in the Real Parity Value Of Euro Against the Dollar (€RPV$) chart.

     Today, the Euro's Market Parity Value against the Dollar is 1.0359, while the Real Parity Value is 1.0532. There is slightly a difference of 1.7% between them.

     When we look at its historical past, we see that it fell to a value of -26% in May 2001. The equivalent of this for the Euro/Dollar parity today is 0.74. It rose to 32% in June 2008. This corresponds to 1.39.

     Our current chart is a different representation of the previous one. The €MPV$ was 0.8228  in May 2001, and 1.6039 in June 2008. We see that the €RPV$ (Real) in red has been decreasing from its value of 1.20 to its current value of 1.05 for about 20 years. The reason for this is that the European economy is weaker than the US economy. The decline in purchasing power in European countries is due to this downward trend in both €RPV$ and €MPV$.

     The last chart is about what may happen to the €MPV$ (Market) in the near future. There were positive values ​​of 12% in February 2018 and 13% in January 2021, and a negative value of -15% in September 2022. In case of an increase or decrease, these rates will be the first targets in the market according to the €RPV$ (Real).

     I think the possibility of a decrease is stronger. Therefore, the €MPV$ (Market) can go down to the value of 0.9128, which is the current equivalent of (-15%) for €RPV$ (Real).

Comparison of the "Real Parity Value" of the US and European Economies

     The table above shows how the Eurozone and the US performed economically in 2024 and how the "Real Parity Value" was shaped.

     The US managed to reduce its inflation from 3.20 to 2.83. The Eurozone's inflation is lower. They also decreased from 2.90 to 2.42. When we look at the growth figures, the superiority of the US is very clear. They closed the figure of 2.90 in 2023 as 2.77 in 2024. The growth of the Eurozone is very low. They achieved rates of 0.40 in 2023 and 0.70 in 2024.

     This superiority of the US causes the "Real Parity Value" to decline. This value, which was 1.0716 at the beginning of 2023, fell to 1.0542 by the end of 2024. There is a decline of (-1.83%) due to the difference in growth figures between the US and Europe.

     In September 2014, the market value of the Euro/Dollar parity peaked at 1.1134, while the value of 1.0353 in December is the lowest value it has seen all year.

     This table is another indicator that the Euro/Dollar parity can fall to much lower values. We will be able to see much better what is what in the coming months.

What Does the "Real Value" of National Currency Mean and What Does It Do?

      The Real Dollar Value (RDV) is created by comparing the growth and inflation rates of two countries at parity.

     The Market Dollar Value (MDV) may emerge at different levels than the RDV in some periods and especially in countries where the exchange rate is controlled.

     Countries with export-oriented economic policies - especially China and other East Asian countries - deliberately devalue their national currencies, resulting in the RDV falling far below the MDV. Such policies can be sustained for many years and contribute to the economic development of countries and the well-being of their people.

     China is the best at implementing this policy. Look at the Chinese Real Dollar Value Chart (RDV) created since the beginning of 1985. The MDV of the Chinese Yuan shown in blue is 7.19, while the RDV of the Chinese Yuan shown in red is 2.84. There is a positive difference of 153%. This is more than 2.5 times.

     This chart is the most important reason for the trade war between China and the US, which will intensify in the coming years. China will not give up, the US will press and we will see how the process will develop.

     A few countries, such as Türkiye and Iran, deliberately press and debase their national currencies to combat inflation and try to keep the Real Dollar Value above the Market Value.

     Look at Iran’s Real Dollar Value Chart. The RDV in red colour was below the MDV at China's chart. But in this chart the RDV curve is considerably higher than the MDV. What will happen as a result? They will be forced to devalue, just like they did in 2001 and 2013. In fact, Iranian currency has been traded at 500,000 to 600,000 against the dollar on the black market for a long time.

     A similar graph is in question for Turkey, although not as severe. We will examine this situation in detail in the Real Dollar Value broadcast in a few days.

Comparison Platinum to Palladium

      Platinum and palladium are metals that are generally used interchangeably in the industrial segment. Therefore, an increase in the price of one will -in most cases- cause a decrease in the price of the other.

     The reason why platinum prices have remained flat while palladium prices have increased after 2015 is due to this connection between them.

     In our first palladium chart, we can see how palladium was overpriced from 2016 to mid-2021, from $482 to $3,014, which is 6.25 times that price. Since then, there has been a significant decline of 3.15 times.

     When we look at the same chart with dollar inflation correction, there is no significant difference between it and the previous chart, as not much time has passed since the last rise. The bottom level is $641, and the top is $3,556.

     Our current chart is the Gold/Palladium Ratio Chart. It is understood that a triple peak has been reached since 2011. I believe that gold will exceed these levels and increase the difference. In February 2020, palladium reached its peak against gold. Therefore, we encounter a value below 1, namely 0.61.

In this chart we have the opportunity to see blue platinum and red palladium in the same picture. While the price of platinum was moving in a horizontal band in 2016, look at how palladium rose. After its peak in April 2011, it fell so much that it became equal to the price of platinum once more.

We can follow this development much better in the Platinum/Palladium Ratio Chart. The latest level is 0.99. In other words, the market prices of platinum and palladium are almost equal. In recent months, sometimes platinum and sometimes palladium have been going up. In October 2012, platinum reached its peak value with 2.62, and in February 2020, palladium reached its peak with 0.31.

I expect platinum to rise to 2.00 again, or even higher. The Platinum/Palladium Ratio Table, which has been created since 1991, has a decent backround that strengthens my belief. I am not sure if you agree or not!

The technical explanation for me giving platinum a higher chance of rising than palladium in the coming period was our previous tables. We will look at the fundamental reasons of this thought in our Platinum, Palladium publication in February 2025. In this context, we will evaluate the supply/demand balance, deficiencies and surpluses on the supply side through future projections.

Platinum Price and Comparison with Gold

     Historically, platinum price has always been above gold. However, over the last decade, the conflict between these two precious metals has significantly deteriorated in favor of gold. So, will platinum regain its value in the coming period and catch up with gold? In this section, we will try to find the answer to this question through charts.

     In the chart above, gold in blue is compared to platinum in red. The correlation between them has broken down in mid-2015 and the price of gold rose significantly above the price of platinum for the first time in history.

     The deteriorating correlation can be seen much more clearly in the platinum and gold chart created since 1880. Platinum prices in black have always been above gold for 100 years except for the last period.

     The extraordinary nature of the trend that has been in favor of gold for the last decade can be better understood in the Gold/Platinum Ratio Chart. In 2011, platinum was more valuable and the Gold/Platinum Ratio was 0.74. In 2021, the rate come to a value ​​​​of 2.21 and then 1.44. Today, the gold/platinum ratio is 2.85. In other words, the market price of gold is almost three times higher than the market price of platinum.

     Let's look at the same graph starting from 1991. Values ​​below one indicate that platinum is more expensive. This was the general picture before 2015. A situation similar to today's jump has never occurred.

     Gold is not overvalued. We discussed this fact in our gold article. So what does this platinum chart show us? It shows that platinum price is undervalued.

     In the next section, we are examining palladium graphs, comparing palladium to platinum, and evaluate future predictions.

Platinum and Palladium - Production Costs and Effect on Prices

     The PGM expression in the second row of the table above stands for Platinum Group Metals.

     The PGMs are platinum (Pt), palladium (Pd), rhodium (Rh), ruthenium (Ru), osmium (Os), and iridium (Ir). The six metals are often found together, but their relative abundances can vary considerably.

     Since they are found together, their production in the mines also occurs simultaneously. Therefore, the reserve amounts are given collectively as PGMs, not separately for platinum and palladium. The total known PGM reserve is around 70,000 tons.

     In the last column of the table above, you see that most of the world's PGM reserves are in the Republic of South Africa. The total reserves, which appear to be 71,000 tons worldwide, are estimated to increase to 100,000 tons after possible discoveries in the future.

     When we look at the production figures, it is understood that the annual production of Palladium in the mines excluding recycling is 190 tons and the annual production of Platinum is 171 tons. The annual production of gold and silver is much higher than these two metals.

     We know that platinum is one-third of palladium in the earth's crust. Considering today's production figures, it can be said that -according to the remaining reserves- platinum has a lifespan of 83 years and palladium 225 years. These numbers correspond to 16 years for gold and 24 years for silver.

     There has been a decline in both platinum and palladium costs. The first reason for this is the depreciation of the South African currency, the largest producer, against the US dollar.

     The second reason is the major decline in the use of platinum for jewelry and investment purposes. There is no such decline in the industrial and automotive sectors. However, the decline in total demand causes high-cost mines to stop production, which in turn causes total costs to decline in terms of averages.

     Therefore, the cost of platinum production has decreased from 1200 dollars in 2013 to 800 dollars today.

     Due to falling demand and closed mines, platinum production has now fallen so much that total annual production has begun to fall short of global platinum demand. A deficit of 759 kilo ounces, in other words 23.6 tons, emerged in 2023. It is estimated that this deficit will repeat itself every year until 2027. Because even if the price of platinum increases, it is not possible for closed or stopped mines to immediately resume operations.

Therefore, the first reason why the market price of platinum will increase in the next 1-3-5 years is this forced decrease in production.

The production cost of palladium is around $ 500, as it can be mined relatively easier and more than platinum.

When we compare the production costs of platinum and palladium with market prices, it is very clear how advantageous platinum is in terms of purchasing, including gold and silver. While the market price of all other precious metals are almost twice of their costs, the market price of platinum is only 18% higher than its cost.

When investment and jewelry demand for platinum increases, the value of platinum will increase. This will bring high-cost mines back into play, and this whole process may cause platinum to catch up with gold once again and even surpass it, both in terms of market price and the ratio of this price to production costs.

Because historically, the price of platinum has always been above gold. This situation is examined in detail in the next section of this blog site by using graphs.

Paper Gold, Paper Silver

 

     In this important table, it is seen that the total value of all coins against physical gold has reached 17.84%, while Bitcoin alone has reached 10.25%. Some experts look at the situation only from this perspective and call Bitcoin as “virtual gold”.

     However, this is a complete deception because just like these virtual cyrpto coins, gold and silver also have many virtual investment instruments such as ETCs, ETFs, gold and silver accounts, certificates, funds, futures and options.

     In fact, the ratio of paper gold to physical gold is 127:1, while the ratio of paper silver to physical silver is much higher at 380:1. Therefore, when we recalculate by taking these amounts into account, the total market value of gold, including paper gold, increases to 2.3 quadrillion dollars, and the total market value of silver, including paper silver, increases to 670 trillion dollars.

     In this context, the total value of all coins falls to only 1.4 parts per thousand of gold, and the weight of Bitcoin falls to 8 parts per ten thousand.

     Gold and silver investments are still the instruments that people use to evaluate their savings the most. And this investment desicion doesn't look to change for a long time.