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Silver unlikely to track gold again, may "never go back as money", here's why - Lobo Tiggre

Kitco News

Even if the world enters into another gold standard, silver, which has historically been used as money, may not retain that role in the future.

“Even if global finance adopts a new gold standard in the future, silver may never go back into circulation as money,” Tiggre wrote in a recent research report.

Speaking to David Lin, anchor for Kitco News, Tiggre said that blockchain technology is now able to fulfill much of the role that silver has historically played, which is to represent fractions of the value of ounce of gold.

“You used silver to make change, and you used copper to make change for silver. That’s how it was. But, in today’s world we have solved that problem beautifully with the blockchain/distributed ledger technology. There are dozens of goldbacak cryptos right now,” he said.

Tiggre also noted that while gold and silver have historically held a tight correlation, that relationship has broken down over the last year.

According to Tiggre’s research, the correlation between gold and silver since 1975 has been 0.8876. The 10-year correlation coefficient is 0.7511. Over the last year, the correlation has dropped to 0.1959.

Going forward, Lobo expects this divergence between silver and gold to last as silver starts to behave more like a base metal, rather than a monetary metal.

“Silver’s value would be derived from its industrial supply and demand fundamentals. The price of silver would track copper more closely than gold,” he wrote in his research report.

For more information on Palantir’s decision to buy $50 million worth of physical gold, and Tiggre’s views on the U.S. stock markets, watch the video above. Follow David Lin on Twitter: @davidlin_TV

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.