Trade Synopsis: Long Silver 

Trade Recommendation: Long Silver (CMP 30.3), TP 40.3 & SL 24.3. 

Introduction: Current Gold to Silver Ratio is about 84.65. 

Assuming that Gold Silver Ratio reverts back to average of the 21st century at 60:1, the price parity for Silver w.r.t. Gold would be in the range of $40-45 levels based upon current Gold levels of 2565. 

With the Silver market widely tipped to experience a fourth straight year of structural market deficits in 2024, many analysts view this renewed strength as just the start of a more bullish environment for silver.  According to the Silver Institute’s estimates in the 2024 WSS, the global silver deficit will rise by 17 percent to 215.3 million troy ounces in 2024 due to an expected 2-percent growth in demand again led by robust industrial consumption combined with a 1-percent decline in total supply. 

The current short-term correction is an opportunity to buy Silver as per above facts. Technically, Silver is currently testing 100 DMA at 30.35. We expect it to consolidate around these levels and move towards 40 levels in the next 6-9 months. 

Risks to the view: Dollar index going above 110.