What Happens If Silver Exchanges Can't Meet Demand? - Peter Krauth

Kitco NEWS
4 Apr 202431:57

Summary

TLDRIn this Kito News episode, host Jeremy Saffer discusses the rising prominence of silver in various industries with guest Peter Krauss, author of 'The Great Silver Bull.' Krauss explains how gold's all-time highs and a shift towards green technologies are driving silver's demand. Despite silver's price consolidating, he predicts a sustained upward trend, potentially reaching $300 by 2030 based on historical ratios and inflation. Strategies to mitigate supply-demand constraints include investing in silver now and exploring alternatives like silver ETFs trading at discounts.

Takeaways

  • 🌟 Silver's price is experiencing a significant increase, breaking past the $26 mark and approaching $30.
  • 🔋 The rise in silver's value is attributed to its diverse applications, including solar panels, electric vehicles, and 5G technology, beyond just jewelry and coins.
  • 📈 The silver market has been forming a triangle pattern on charts since March 2023, indicating a potential for a major price movement.
  • 💡 Peter Cruss, author of 'The Great Silver Bull', suggests that gold's all-time highs and lack of mainstream excitement could be a bullish sign for silver.
  • 📊 Despite the potential for a short-term correction, Cruss believes we are at the beginning of a sustained, long-term upward trend for silver prices.
  • 🔄 Silver's industrial demand is growing, with solar panel production alone forecasted to require over 200 million ounces in the coming year.
  • 🌍 Geopolitical tensions and economic policies are also contributing factors to the reshaping demand for silver globally.
  • 🏭 Silver mining output has dropped significantly in countries like Mexico and Peru, raising concerns about future supply.
  • 💰 The gold-silver ratio and historical comparisons with real estate prices and inflation rates are used to make bullish predictions for silver's future value.
  • 🚀 Cruss projects a potential silver price climb to over $30 in the latter half of 2024 and speculates about reaching $300 by 2030 based on various indicators.
  • 💡 Investors are advised to purchase silver now while premiums are relatively low, as demand and prices are expected to increase.

Q & A

  • What is the current trend for silver prices as discussed in the transcript?

    -The current trend for silver prices, as of the discussion, is an upward movement. Silver has broken past the $26 mark and is getting closer to $30.

  • What are the main factors driving the recent silver rally as per the discussion?

    -The main factors driving the silver rally include gold making all-time highs, increased industrial uses of silver especially in solar panels and electric vehicles, and its role in 5G technology. Additionally, the lack of mainstream media attention and public excitement about gold is seen as a bullish sign for precious metals.

  • What is the triangle pattern on silver market charts and what does it suggest?

    -The triangle pattern on silver market charts is a technical analysis pattern where the price swings become progressively smaller, suggesting that the silver market is at a crossroads. This pattern usually indicates a period of consolidation before a significant price movement, either up or down.

  • What does Peter Cruss think about the potential for a sustained upward trend in silver prices?

    -Peter Cruss believes that the current market conditions indicate the start of a very long and sustained move much higher for silver prices. He bases this on the lack of public excitement around gold reaching all-time highs, which historically has been a sign that the market is closer to the beginning of a bullish phase rather than the top.

  • What are the potential short-term challenges for silver prices near the $30 mark?

    -Peter Cruss suggests that there may be a small correction in the short term due to high speculation levels in the futures market. However, he believes that any potential short-term dip would not significantly affect the overall sustained upward trend for both gold and silver.

  • How is the global push towards green technologies affecting the demand for silver?

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  • What is the significance of the solar industry in the silver market according to the transcript?

    -The solar industry is significant in the silver market as it represents a large portion of industrial demand for silver. The solar industry's growth has led to an increase in silver usage, with forecasts suggesting a demand of over 200 million ounces of silver in the coming year, which is about 20% of the entire silver market.

  • What are the implications of the shift towards newer solar technologies that require more silver per panel?

    -The shift towards newer solar technologies that require more silver per panel indicates a growing demand for silver in the industry. Even if the growth in solar manufacturing capacity plateaus, the transition to these newer technologies will continue to drive up silver demand.

  • What are the challenges in silver supply as discussed in the transcript?

    -The challenges in silver supply include a significant drop in output from major silver-producing countries like Mexico and Peru over the last decade, and the fact that there are limited places in the world where silver can be found and mined. Additionally, mines reach the end of their productive lives or face geopolitical and profitability issues, leading to a structural deficit in the silver market.

  • How does the silver market's structural deficit affect its price?

    -Despite the structural deficit, the silver price has not significantly increased as one might expect from basic supply and demand economics. This discrepancy suggests that large industrial users may be sourcing silver through other means, such as futures contracts and silver ETFs, which could be drawing down the available silver inventories.

  • What is the potential impact of large consumers demanding physical delivery of silver?

    -If large consumers demand physical delivery of silver and the exchanges are unable to fulfill these contracts, it could lead to a significant market disruption. This scenario could result in a situation where consumers demand silver over cash settlements, potentially leading to a sharp increase in silver prices.

  • What is Peter Cruss's long-term outlook for silver prices?

    -Peter Cruss has a bullish long-term outlook for silver prices. He projects a potential climb to over $30 in the latter half of 2024 and even suggests that silver could reach $300 per ounce by 2030, based on historical price trends, gold-silver ratio, and comparison with other asset classes and inflation rates.

  • What investment strategies does Peter Cruss recommend for dealing with the silver market's supply and demand crunch?

    -Peter Cruss recommends investors to buy silver now while the interest is relatively low, as it is likely to become more expensive in the future. He also mentions the option of investing in silver ETFs that may trade at a discount to their net asset value, providing an alternative way to gain exposure to silver without overpaying.

Outlines

00:00

📈 Silver's Market Surge and Its Driving Factors

Jeremy Saffron introduces the discussion on the rising silver market, highlighting its significance beyond jewelry and coins. Silver is now crucial in solar panels, electric vehicles, and 5G technology. The market has formed a triangle pattern since March 2023, indicating a potential breakout. Peter Cruss, author of 'The Great Silver Bull', shares his insights on the market's dynamics, attributing the rally to gold's all-time highs and a lack of mainstream excitement, which he views as bullish for precious metals.

05:02

🌐 Impact of Global Shifts on Silver Demand

This paragraph delves into how global shifts towards green technologies and geopolitical tensions are reshaping silver demand. The surge in industrial uses, particularly in solar panels and electric vehicles (EVs), is a key driver in the silver market. Cruss explains that solar demand, led by China, is a significant factor, with forecasts showing a dramatic increase in silver usage for solar panels. He also discusses the transition to newer technologies that require more silver per panel, thus increasing the demand further.

10:04

🤔 Market Manipulation and Silver's Price Trends

The conversation turns to potential market manipulation and its impact on silver prices. Cruss discusses the high level of speculation in the futures market and the possibility of a minor correction in the short term. However, he believes this could be a sustained upward trend. The discussion also touches on the lack of public excitement about gold and silver, which Cruss sees as a sign of a market that's closer to the beginning rather than the peak.

15:05

🌍 Regional Dynamics in Silver Production

This section explores the regional aspects of silver production and demand. Mexico and Peru are identified as significant silver producers, but their output has dropped significantly over the last decade. Cruss raises concerns about where new silver will come from, given the lack of new discoveries. He mentions potential areas such as Australia and Europe that might see increased silver production. The focus is on the need to watch these regions closely as they could impact the global silver market.

20:06

📉 Silver's Structural Deficit and Price Impact

Cruss discusses the structural deficit in the silver market, noting that despite consistent deficits and increasing demand, the price has not reflected this imbalance. He suspects that large industrial users are sourcing silver through futures contracts and ETFs, leading to a decrease in available silver inventories. This has implications for the market, as these contracts may not be fulfilled with physical delivery, potentially leading to market chaos if silver becomes scarce.

25:08

🚀 Silver's Future Outlook and Potential Reach

Peter Cruss shares his bullish outlook on silver, projecting a potential climb to over $30 in the latter half of 2024 and even reaching $300 by 2030. He bases this on historical silver price trends, comparisons with gold, and inflation rates. Cruss suggests that as gold reaches new highs, investors will shift their interest to silver, driving up its price. He emphasizes that this is a long-term view and that silver could see a mania phase similar to other assets.

30:11

💡 Strategies for Investors Amidst Silver Market Dynamics

Cruss provides investment strategies for dealing with the silver market's dynamics, advising investors to buy silver now while premiums are relatively low. He mentions the Royal Canadian Mint's silver ETF as an alternative for gaining exposure to silver at a discount. Cruss encourages investors to get involved early, buy a little at a time, and suggests that the shift from gold to silver will increase investment demand and push silver prices higher.

🙌 Wrapping Up the Discussion on Silver

Jeremy Saffron concludes the interview with Peter Cruss, thanking him for his insights and contributions to the discussion on silver. They touch on the importance of understanding the silver market and the potential opportunities it presents for investors. The conversation ends with a reminder for viewers to engage with KITO's content and look forward to future discussions.

Mindmap

Keywords

💡Silver

Silver is a precious metal that has a wide range of applications, from jewelry and coins to industrial uses such as solar panels, electric vehicles, and 5G technology. In the video, silver's increasing role in modern technology and its impact on market demand are discussed, highlighting its significance in both investment and industrial sectors.

💡Market Trends

Market trends refer to the general direction or pattern that prices of assets, like silver, follow over time. The video discusses the formation of a triangle pattern on silver market charts since March 2023, indicating a potential for a significant price movement. Understanding market trends is essential for investors to make informed decisions.

💡Investment Demand

Investment demand refers to the desire of investors to purchase a particular asset, like silver, as a store of value or for potential profit. In the context of the video, investment demand is a significant factor driving the price of silver, with gold's all-time highs influencing silver's rally.

💡Supply and Demand

Supply and demand is a fundamental economic concept that describes the relationship between the quantity of a commodity that producers wish to sell and the quantity that consumers wish to buy. In the video, the dynamics of supply and demand for silver are explored, with a focus on the impact of industrial uses and the potential for future shortages.

💡Solar Panels

Solar panels are devices that convert sunlight into electricity. They are a key application for silver, as the metal is used in the photovoltaic cells to enhance their efficiency. The video emphasizes the growing significance of solar energy in the global push towards green technologies and its impact on silver demand.

💡Electric Vehicles (EVs)

Electric vehicles, or EVs, are automobiles that run on electric power rather than internal combustion engines. Silver is used in various components of EVs, including electric motors and battery systems. The rise in popularity and production of EVs is a factor contributing to the increased demand for silver.

💡5G Technology

5G technology refers to the fifth generation of mobile networks, characterized by faster data transfer speeds, lower latency, and improved connectivity. Silver plays a role in the components and infrastructure necessary for 5G, making it a critical material in the advancement of communication technologies.

💡Price Manipulation

Price manipulation refers to the act of artificially inflating or deflating the price of a security or commodity. In the context of the video, there is a discussion about potential manipulation in the silver market, particularly in the futures market, and its impact on short-term price movements.

💡Geopolytical Tensions

Geopolytical tensions refer to the strain in relationships between nations due to various political, economic, or strategic factors. These tensions can affect global markets, including the demand and supply of commodities like silver.

💡Economic Policies

Economic policies are the actions taken by governments to influence economic outcomes, such as growth, inflation, and employment. These policies can have a direct or indirect impact on the demand for commodities, including silver.

💡Industrial Uses

Industrial uses refer to the application of a commodity or material in the manufacturing and production processes of various industries. For silver, its industrial uses are significant and growing, particularly in green technologies, which drive up demand and influence market dynamics.

Highlights

Silver is making waves in the market, breaking past the $26 mark and getting closer to $30.

Silver's role is expanding beyond jewelry and coins to power solar panels, electric vehicles, and 5G technology.

The silver market has been forming a triangle pattern on the charts since March 2023, indicating a potential breakout.

Gold reaching all-time highs is a significant factor propelling the rally in silver prices.

The lack of excitement in mainstream media about gold's all-time highs is very bullish for precious metals.

The potential for a small short-term correction in silver and gold prices due to high speculation levels.

The global push towards green technologies is reshaping the demand for silver, with solar panels being a significant driver.

Solar capacity is being built out dramatically, with China leading about 80% of the market in manufacturing and demand.

The transition to new solar technologies requiring more silver per panel is expected to continue feeding the demand for silver.

Supply and demand issues in the silver market, with demand rising and supply falling, have not yet led to a significant increase in prices.

Large industrial users may be buying long futures contracts and standing for delivery, draining silver from exchanges and ETFs.

Peter Cruss, author of 'The Great Silver Bull', predicts a potential climb of silver prices to over $30 in the latter half of 2024.

A long-term projection by Cruss suggests silver could reach $300 per ounce by 2030 based on historical ratios and inflation rates.

The gold to silver ratio historically has been around 15:1, which could indicate a higher future value for silver if gold continues to rise.

Investors may shift interest from gold to silver as gold prices rise, making silver a more attractive alternative.

Strategies to mitigate the impact of supply and demand constraints include buying silver now and taking advantage of silver ETFs trading at discounts.

The importance of getting involved in the silver market when investor excitement is low to benefit from more reasonable delivery times and premiums.

Transcripts

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hey everyone I'm Jeremy saffron and this

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is Kito news make sure you hit that

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subscribe button for the freshest

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insights in markets and of course

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Commodities well silver is Making Waves

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again folks today we're seeing a break

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past at $26 Mark aging closer to $30 so

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why the buzz well it's not just jewelry

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and coins anymore Silver's powering our

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future from solar panels lighting up our

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world to electric cars zipping around

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our cities not to mention its role in

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The Cutting Edge world of 5G technology

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however the journey for silver has seen

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its twists and turns since March 2023

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the silver market has been forming what

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analysts call a triangle pattern on the

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charts this pattern where the price

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swings not progressively smaller

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suggests that silver is at a Crossroads

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with its price consolidating and

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building energy for its next big move

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now the setup often leads to a breakout

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but whether silver will shoot up or

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tumble down Remains the big questions

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keeping investors on our toes today to

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explain this author of this book The

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Great silver Bull and publisher of the

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the silver Focus newsletter the silver

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stock investor Peter cruss joins us now

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thanks for coming on the show Peter

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Jeremy pleasure to be here always a

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pleasure uh we were just talking off

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camera a second I saw you a couple

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months ago there was a lot of excitement

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in the industry even more today so let's

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break it down Peter with today's price

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breaking the $26 Mark covering around 26

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almost 27 getting closer to $30 anyhow

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talk to me a little bit about the main

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factors propelling the rally and how

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does it the line with your long-term

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predictions so I mean I think that

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really what's driving silver right now

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because you're right you mentioned as

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your opening this it's been in a sort of

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consolidating uh uh move for the last

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few years in fact I think that um really

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what's driving it right now is gold

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making all-time highs and uh you know

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that's actually impressive and

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impressive by the fact that uh people

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are not excited about it you don't gold

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being quoted on mainstream media through

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their their their ticker um their ticker

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marker running across the screen um I

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just read yesterday that you have uh

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coin dealers are actually receiving

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twice as many requests to buy back gold

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from their clients than they are to sell

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to their clients so sentiment really is

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nowhere close excitement and that is

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very very bullish for the precious

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minals because it tell tells you that

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we're much closer to the beginning than

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we are to any kind of a top where when

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you get you know at a top when you get

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this fear of missing out and everyone's

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overly excited that's when your odds of

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uh you know it being sustained are are

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much lower people have have done all the

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buying they're just everyone's sort of

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piling in and there's not much of the

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move left here we're we're really at the

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opposite end so I think that this is a a

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the start of a very long and sustained

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move much higher okay okay so you think

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this will be a sustained upward Trend

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I'm curious you know this price action

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we always see it get close to that $30

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mark it almost seems like the Market's

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short a little bit talk to me a little

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bit about the manipulation what happens

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here at these

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levels so I mean you know we also don't

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have uh too much excitement there the

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one side where there is I guess a fair

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bit of participation and that is in the

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Futures I was just looking at some of

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the numbers this morning and so we are

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getting to a point where speculation is

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kind of high uh we may get a small

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correction that would certainly not

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surprise me um I hope we don't get all

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kinds of hate mail because of it and I'm

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as big a silver bow as anyone but that's

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my point is on a very shortterm basis I

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think both both gold more more gold

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actually because gold is at all-time

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highs uh but I do think both medals

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could be in for a really small

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correction I'm really talking small

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amounts over the next sort of week or a

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couple of weeks um just because really

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has become little sort of near-term Bry

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absolutely much more gold and silver um

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that would not surprise me but yes these

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are mes that could could certainly be

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sustained and I think that where when it

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comes to manipulation my view at least

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is that uh there is manipulation and not

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just but not just in these markets and

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that that tends to be kind of on a on a

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shorter term basis uh the big players

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play with the markets play with the

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price benefit from it in terms of a sort

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of a longer term um uh managed kind of

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manipulation that's where I honestly

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don't know a lot about uh the the the

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Futures Market but also have a hard time

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understanding how that would be uh

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possible to sustain on an ongoing basis

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I'm talking years and perhaps even

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decades now let's give a little bit of a

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take on let's let's go back a little bit

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and talk a little bit about silver just

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as a metal here you've highlighted how

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the global push towards green

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technologies is coupled with of of

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course geopolitical tensions and then we

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got the economy and econ economic

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policies here it's really reshaping the

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demand for silver so as we see a surge

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in the industrial uses particularly as I

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mentioned off the top and solar panels

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and EVS elaborate a little bit on how

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these factors synergize to influence the

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Dynamics here in the silver

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market so you know if if you're looking

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at the silver market really if if you're

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not paying attention to what's happening

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in solar in particular then you're

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really missing uh I would say probably

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the biggest single driver other than

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investment demand because solar has

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really become what I call sort of the

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800 pound gorilla in the market U it

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went from few tens of millions of ounces

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maybe a decade ago to over 200 million

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ounces next year that's what the

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forecast is we were at apply 190 or so

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million ounces in

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2023 and um so so industrial has become

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more than half of the silver market in

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terms of demand and solar represents

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something like 30% of just industrial so

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solar at 200 million ounces is 20% of

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the entire solar Market every year right

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which is roughly about a billion ounces

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so you've got to watch what's happening

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in solar and the fact is that solar

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capacity is being built out dramatically

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led by the Chinese about 80% of the

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market is China terms of

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manufacturing and solar demand so sales

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of these panels has also been beating um

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forecasts dramatically now if you take

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sort of a I think a reasonably even

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conservative view of solar and you say

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to yourself all right so there's been

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all this

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capacity um what if there's some sort of

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uh recession things slow down and

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there's less demand for solar and solar

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kind of plateaus and and building out of

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the solar um uh

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uh e economy and the solar sector starts

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to Plateau you are still going to get a

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lot of demand of silver in from the

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solar sector just because we are

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transitioning to new technologies so the

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I guess incumbent technology is what we

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would call Perk um it's about half of

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manufacturing capacity right now about

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three or four years ago the next two

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technologies that by the way require

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from 50 to 150% more silver per panel

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these were about 10% of manufacturing

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capacity last year combined they were

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already

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35% the silver Institute thinks that the

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Next Generation which is 50% more silver

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per panel is going to already represent

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50% of new manufacturing capacity this

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year alone so even if we plateau in um

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silver sorry in solar manufacturing

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capacity the fact is that we're moving

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to techn IES that require more silver so

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that is going to continue to feed the

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demand um of silver from the solar

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industry Peter you continue to talk a

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little bit about supply and demand

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supply and demand and that Divergence

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over the past couple of years I'm

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curious if you anticipate any specific

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regions becoming maybe more pivotal in

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silver production or innovation

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here well when you talk about regions

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you mean

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geographically yeah I'm thinking

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geographically I mean silver mining

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obviously you know Mexico's largest one

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here are you seeing any specific regions

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you know trying to really bolster up

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their supply and demand issues going on

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in silver and trying to take over that

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that

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demand well as you say uh Mexico

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certainly is by far the largest producer

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from there you have S in second place

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and it's a little bit debatable whether

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it's China or Peru uh but both Mexico

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and Peru where we have I guess what

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you'd call relatively reliable data have

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seen their output drop dramatically

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something like

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20% over the last 10 years or so so

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that's kind of concerning where are we

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going to get new silver from um great

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question there aren't that many places

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that you can actually find silver if you

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look at the Americans it tends to be uh

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focused on sort of the West Coast so you

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see whether it's Canada the us all along

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sort of that uh that the these um

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mountain ranges is where you tend to see

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concentrations of silver in South

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America it's the same thing mostly along

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the Sierra mandre the Andes and so on um

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there is a potential that we're going to

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see more silver come out of places

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perhaps like Australia uh perhaps even

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Europe there there is a lot of silver

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that comes out of Poland um there are

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there is one um sort of smallish

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potential project that I see in Germany

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for example that's a long ways off uh

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there is a project in I believe it's

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Serbia starting to come online uh

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there's a large producer uh a relatively

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large producer out of Morocco that's a

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place I think we need to watch carefully

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that's a gold and silver uh they're

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actually in the midst of a big expansion

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that's going to take their production

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from 2 million ounces to 8 million

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ounces now that's fantastic for a and

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for a investors but it's going to do

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very little to uh impact Supply and I

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was actually talking to a re um silver

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researcher this morning and talking

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about the whole sort of demand Supply

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um aspect of the market and really there

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are constantly new minds coming into

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production the fact is that there are

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also regularly mindes going off

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production either they've reached the

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end of their lives um or there are some

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sort of geopolitical issues um they

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could be not profitable The Mining

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Company decides

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we're there are some serious challenges

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there was a a interesting bit of

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research from Bank of America a little

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while back that looked at they went and

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looked um at the 13 largest primary

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silver Ling companies asked them where

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they thought Silver Mine Supply was

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going to be over the next couple of

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years and they all said on average it's

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going to be flat for the next at least

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two to three years it peaked at 900

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million ounces in 2016 they expect we're

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going to be about 800 million ounces

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over the next you know per year over the

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next couple of years which is just

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incredible when you think of how land

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has just been ballooning and and the the

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deficit deficits that we've been living

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through uh each year for the last four

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years have um have been sustained and

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the silver Institute thinks those will

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continue to be sustained so I mean we

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can talk about that a little bit too

play11:44

there are structural deficits uh why is

play11:47

the silver price sort of uh capped if

play11:50

you wish if we're facing deficits and uh

play11:54

you know i' I've spent some time doing

play11:55

some research and some digging and I and

play11:57

I think I know what what is um affecting

play12:01

the market this way what what we've seen

play12:03

in the last couple of weeks um it looks

play12:06

like it may actually be starting to uh

play12:09

reverse but um there are some really uh

play12:13

specific things I think that have have L

play12:15

to where we are right now that's

play12:17

interesting I want your outlook on

play12:19

Silver but before we get to that then

play12:20

talk to me a little bit about that

play12:22

what's holding us back usually when you

play12:23

have a supply and demand issue and

play12:25

demand is up and Supply is down the

play12:27

prices go up but it hasn't really been

play12:29

there exactly so that's economics 101

play12:32

exactly right Jeremy so you know I I had

play12:36

sort of a susp suspicion that if we had

play12:39

structural deficits and the price was

play12:42

really not moving and we had you know

play12:44

it's it's not just one year or two years

play12:46

it's been four years straight we still

play12:47

have forecast for these sizable deficits

play12:50

we're talking multi you know say well

play12:53

above 100 million ounces a year so more

play12:54

than say 10 to 15% of the entire Market

play12:57

again in structural deficit for the next

play12:59

couple of years at least how is it and

play13:02

why is it that um we're not seeing the

play13:05

silver price move and I had this

play13:08

suspicion that industry especially which

play13:10

is the big consumer is getting their

play13:14

silver somewhere somehow um rather than

play13:17

from mining or from from the uh

play13:19

recycling which are the two main

play13:21

suppliers normally and so if you look at

play13:25

and so I did some digging found um

play13:27

inventory charts for the comx for the

play13:30

lbma for the Shanghai and over the last

play13:33

three to four years each and every one

play13:35

of those exchanges has seen their

play13:37

overall silver in inventories drop about

play13:40

30 to

play13:41

40% wow and now that's just overall

play13:45

inventories that's not what is supposed

play13:47

to be available for delivery they've got

play13:50

something called registered silver which

play13:52

technically apparently is what is

play13:54

available for delivery if if you want to

play13:56

take delivery um and that's down 70 % on

play13:59

two of those three exchanges so I

play14:04

suspected and still do that you have

play14:06

large industrial users going to these

play14:10

these Futures exchanges buying long

play14:12

Futures contracts and simply standing

play14:14

for delivery going to The Exchange and

play14:16

saying okay you know my contract is

play14:18

expired now I'm entitled to take

play14:20

delivery here's the address here's where

play14:21

I want it shipped and and that's that

play14:24

and so there's another aspect too and

play14:27

that is the silver ETFs and right they

play14:30

have seen um their inventories drop

play14:33

dramatically you know I did some

play14:35

research on this and there's some really

play14:38

interesting um uh charts that I've put

play14:40

together one looks at you know the you

play14:43

really kind of uh can can look at one

play14:46

which is the largest which is SLV goes

play14:48

back to 2006 the first uh and of all

play14:51

silver ETFs and the largest has about10

play14:54

billion dollar worth of silver and um if

play14:58

you look at how two two aspects of SLV

play15:02

you look at how the silver price has

play15:04

behaved and you look at the number of

play15:07

ounces that are held by SLV so going

play15:12

back to 2006 there are two periods where

play15:15

early on in its life where you would

play15:18

have um you know silver the silver price

play15:21

ran up went through a correction the

play15:23

first one was in the great financial

play15:24

crisis so silver went up to about I

play15:27

think it was about 18 or 19 $20 or so

play15:29

corrected to about $10 and then um and

play15:34

what happened during that period was you

play15:37

still had the number of ounces held by

play15:39

SLV rise in that in that period when the

play15:42

silver price corrected during the the

play15:44

financial crisis so that means that

play15:47

people were still buying SLV despite the

play15:50

silver price falling the next period was

play15:54

um when silver the silver price peaked

play15:56

in 2011 at say $49 and over the next

play15:59

couple of years went into a big

play16:01

correction and went down to about $25 or

play16:04

$30 during that period the number of

play16:07

silver ounces H held by SLV also moved

play16:11

or this time moved in a sideways uh

play16:13

pattern so people on balance were not

play16:16

selling their SLV uh units now fast

play16:21

forward to 2020 2021 you had this big

play16:25

runup in the silver price when the co

play16:28

pandemic hit silver went from uh say $12

play16:31

when it corrected in say March of 2020

play16:34

run up to $30 and since then have been

play16:37

in a range of say 22 to almost 28 $30 U

play16:41

ever since about mid

play16:43

2020 however since early

play16:47

2021 the number of in fact in that

play16:50

period in 2020 when covid hit the number

play16:53

of silver ounces held by SLB ran up

play16:55

dramatically to like an all-time record

play16:58

high I think it was something like um

play17:00

600 million ounces and ever since then

play17:03

it's been dropping and dropping steadily

play17:05

so we've had about three years of

play17:07

sustained drops uh in the number of

play17:10

ounces of silver held by SLV and yet the

play17:13

silver price moved sideways there has

play17:16

not been in SLV a period of sustained

play17:20

falling of ounces held by the ETF until

play17:25

the last three years I believe here

play17:28

again you have the large consumers are

play17:31

buying SLV are allowed to exchange their

play17:36

units for physical silver and taking

play17:38

delivery and that explains in my again

play17:41

my view that explains why we've seen the

play17:43

silver being drained out of SLV as much

play17:46

as out of the U out of the Futures

play17:48

exchanges interesting interesting stuff

play17:51

I'm curious what are the implications of

play17:53

a market where these contracts can't be

play17:55

fulfilled with

play17:57

delivery so that's what um I'm wondering

play18:01

about myself and sound like what do you

play18:03

do yeah I mean I think that's going to

play18:06

be some sort of chaos uh I think that

play18:10

you're gonna have a big consumer of

play18:13

silver stand for delivery these markets

play18:16

were not really meant for that but this

play18:17

is as I say based on what I can tell how

play18:20

a lot of uh the industrial users are

play18:22

actually getting some of their silver um

play18:26

this is where they're getting it and all

play18:28

it takes is for one big consumer to go

play18:30

to the market hold a long contract say

play18:33

okay it's expired now I want my silver

play18:35

and for the exchange to say oops sorry

play18:37

we're out of silver um we're gonna have

play18:39

to pay you out in cash and they're GNA

play18:41

say no no no I want I want the silver I

play18:43

don't want the cash and you'll say sorry

play18:45

Force meure noral silver left here's the

play18:48

cash and that and there and that

play18:50

consumer that user silver is going to

play18:52

scream and we will hear about it

play18:55

interesting does the user or consumer is

play18:57

is there Rumblings of this I mean do

play18:59

people know about this have you been you

play19:01

you're in the industry people talking

play19:03

about these

play19:04

Rumblings I have not heard about it uh

play19:06

you know I've what I have heard is in

play19:09

fact uh just about a month and a half

play19:11

ago a large large-ish silver producer

play19:15

has told me that they sell part of their

play19:18

production to China they sell part of

play19:20

their production to the west and the

play19:22

Chinese are coming to them and they're

play19:24

saying we really really really want the

play19:27

silver we we're prepared to pay you a

play19:30

couple of weeks in advance and we're

play19:32

actually prepared to pay you $3 over

play19:34

spot in order to get our silver we

play19:37

absolutely want our silver so that to me

play19:39

is the best indication of the tightness

play19:42

in the market it is severely tight but

play19:45

we're we're just not hearing about it

play19:46

and this is um you know it's these kinds

play19:49

of of anecdotal bits of evidence that

play19:51

certainly point to it yeah interesting

play19:54

uh what an analysis uh okay let's get

play19:56

back on to the Outlook because of of

play19:58

course supply and demand should mean

play20:00

prices go up and you've suggested

play20:02

obviously you have a bullish Outlook but

play20:04

you've projected a potential climb to

play20:06

over $30 in the latter half of 2024

play20:08

we're currently sitting around that 2686

play20:11

we're getting close right uh you

play20:13

probably were correct in there but

play20:14

you've even positioned yourself uh maybe

play20:17

a scenario where silver could reach $300

play20:20

Us by 2030 so let's break this down you

play20:23

may have been correct about the 30 but

play20:25

300 well 300 I mean I know it's sounds

play20:28

Sensational but uh when I got to that

play20:31

number what I did was um I looked at

play20:35

what had happened to silver prices in

play20:36

the past uh and and I compared it to

play20:39

other other assets important assets hard

play20:42

assets typically or U stock indices for

play20:46

example large indices and so couple of

play20:48

examples are one of the probably your

play20:51

your viewers understand and know the

play20:53

best is the gold silver ratio so I said

play20:56

okay if I'm going to look at where where

play20:58

Sil silver could go ultimately uh what

play21:01

has it done in the past well in 1980

play21:04

when gold peaked and silver peaked the

play21:07

ratio fell to somewhere around 14 or 15

play21:11

at the time gold was $800 silver was

play21:14

about $50 and the ratio as I say was

play21:17

let's use 15 so I said okay if I look

play21:20

forward and I make my own projections

play21:21

and I'm not the only one by the way and

play21:23

I and I detail this very I provide lots

play21:26

of detail about this in the book how I

play21:28

get this uh the fact that I'm not the

play21:30

only one I I believe some very very very

play21:33

smart uh you know observers uh

play21:37

researchers in the sector have forecasts

play21:39

for gold and um I went with 5,000 I

play21:43

think that's a realistic Target we're

play21:45

almost halfways there at this point so I

play21:47

don't see 5,000 as the biggest stretch

play21:50

in this bull market in any case if you

play21:52

use $5,000 gold Target and um you say 15

play21:57

to one you're to $333 Silver so to me

play22:02

not a stretch if you use and I think

play22:04

it's probably perhaps more realistic

play22:07

ultimately perhaps say we go to and

play22:09

again I'm not the only one some very

play22:12

Savvy very accomplished very well

play22:14

respected analyst it's all in the book

play22:17

have reached

play22:18

$10,000 um as a target for gold and if

play22:21

you do perhaps say $10,000 and you use a

play22:24

more conservative gold silver ratio of

play22:25

say 30 instead of 15 you're still AT3

play22:28

$33 for silver so that's the gold silver

play22:32

ratio if you look at for example in 1980

play22:35

when silver peaked uh you look at the

play22:37

silver price versus let's say the

play22:39

average home price so at that point when

play22:43

silver peaked it took just shy of about

play22:46

1500 ounces of silver to buy the average

play22:48

us home if you go with to today's

play22:51

numbers the average us home costs about

play22:53

$500,000 let's say make it even easy

play22:56

round numbers if you use that same ratio

play22:59

you're looking at um again uh right

play23:02

around I believe it was3 $333 silver so

play23:07

by that measure again you're

play23:09

at over $300 in silver if I look at the

play23:13

inflation rate and you know officially

play23:16

we're at say 3% if you look at where

play23:19

we've been for the last several decades

play23:20

it's probably averaged about somewhere

play23:22

around three maybe four uh but more

play23:25

realistically and everybody in their

play23:27

daily lives will tell you that uh they

play23:30

don't they're not comfortable with those

play23:31

numbers they don't feel that they

play23:32

represent what people actually have to

play23:35

deal with and live with and there's a

play23:37

fantastic research uh service called

play23:39

Shadow stats that calculates in fact

play23:42

inflation um the way it was back in the

play23:44

1980s and um they have uh inflation

play23:48

running at more like seven or eight% for

play23:51

the last say 40 or 50 years so if you

play23:52

project um using inflation rates that

play23:55

are more realistic again you get a a

play23:59

peak in silver much closer to about $300

play24:02

so I think I'm being quite reasonable

play24:04

and and I also say that to get to that

play24:06

Peak um we're going to be in some kind

play24:08

of a Mania phase I'm not saying Silver's

play24:11

going to steadily to $300 and it's going

play24:14

to stay there and then and or it's going

play24:15

to keep climbing I'm saying you know

play24:18

ultimate crazy F Mania silver could

play24:21

easily reach

play24:22

300 yeah well I mean we've heard we've

play24:24

heard crazier things over here so uh I

play24:26

could probably you know I'm not going to

play24:28

call you out on it I'm I'm curious so

play24:30

you know when you talk a little bit

play24:31

about that gold silver ratio it seems to

play24:34

be very Divergent I talked to an analyst

play24:35

last week saying he's not sure if it'll

play24:37

ever go back to the place that it was

play24:39

but I'm curious are consumers or

play24:41

investors purchasing silver because it's

play24:43

easier entry to the market in terms of

play24:45

price than

play24:46

gold so that's one of the reasons I

play24:49

think that silver lags gold but then

play24:51

eventually outperforms it

play24:53

because I so so people will go to gold

play24:57

first or pay attention to gold first

play24:59

because it's it's the king of of assets

play25:01

it's the king of uh it's certainly the

play25:03

king of precious metals it has been for

play25:05

thousands of years and so everyone pays

play25:08

attention to gold first and as you see

play25:10

people ultimately

play25:12

eventually decide they absolutely need

play25:15

some exposure to gold and gold you know

play25:17

let's say we're talking about 12 months

play25:19

from now gold has run up it's 2500 it's

play25:22

2600 let's say um they're going to look

play25:25

at gold and say wow that's that's rich

play25:28

you you know for me to buy an L of gold

play25:29

and to put that kind of money out um

play25:32

what else what else can I get and silver

play25:35

is the natural alternative to that and

play25:37

even if silver is at say 30 or 35 or $40

play25:41

they're going to look at gold 2,500 for

play25:44

an ounce silver $40 for an ounce um much

play25:48

less

play25:50

uh it will have run up much less even at

play25:54

that point still below its all-time high

play25:57

gold will have set new all-time highs

play25:59

and I think that um that's one of the

play26:01

reasons that silver will gain in appeal

play26:04

you'll have investment demand really

play26:06

become the wild card it will pick up

play26:08

dramatically and people will shift their

play26:10

interest from gold to Silver and and

play26:13

really push through investment Dem man

play26:15

push the price ultimately a lot higher

play26:18

interesting you know we talked a lot

play26:19

about the supply and demand crunch here

play26:21

how do we prepare for it are there

play26:22

strategies that you could talk to

play26:24

investors about that could maybe

play26:25

mitigate the impacts of these

play26:27

constraints on the market

play26:29

so if you're talking are you talking

play26:31

about say investment demand specifically

play26:34

exactly

play26:35

yeah uh buy it and buy it now because

play26:38

it's probably only going to get more

play26:41

expensive uh you know yes people will

play26:44

say well the premiums are high they're

play26:46

actually not as high as they have been

play26:49

uh if you look at um and I'm not saying

play26:51

that that they're that they're not that

play26:53

they're low I'm saying that they're not

play26:55

as high as they've been if you look at

play26:56

what happened during Co you could not

play26:58

even get your hands on Silver if you

play27:01

looked at what happened um during the

play27:03

silver squeeze of late January

play27:06

2021 again you could not get your hands

play27:09

on Silver I mean there are stories I

play27:11

talk about that in the book where you

play27:12

have um you have these uh bulling

play27:15

dealers just never witnessed anything

play27:18

ever like that and then these are people

play27:20

who've been in business for decades at

play27:22

sometimes a second generation they've

play27:24

never lived through markets like that

play27:27

their their computer systems were

play27:29

overwhelmed their phone systems were

play27:31

overwhelmed and they knew it was

play27:34

basically retail buying because it was

play27:36

mostly small orders and they were

play27:38

starting to tell people I'm sorry I

play27:40

can't I can't ship this in two or three

play27:42

days I'm going to have to ship it in two

play27:44

or three weeks and in India for example

play27:47

best uh to the best of my recollection

play27:50

some of the uh some of the premiums this

play27:52

would have been uh during the covid

play27:54

pandemic Panic went up to uh almost 100%

play27:57

over spot right so people really really

play28:00

wanted the silver and were willing to

play28:02

pay for it and I'm suggesting get

play28:05

involved when you know people are not

play28:08

excited you will have the the benefit of

play28:11

having access getting delivery under

play28:13

reasonable times um you know being able

play28:16

to shop with with peace of mind you'll

play28:19

you'll pay as I say reasonable uh

play28:21

premiums relatively reasonable they tend

play28:23

to where normal premiums historically

play28:25

have been say 12 to 15%

play28:28

if you're even at somewhere around 20% I

play28:31

think that's attractive today and I

play28:34

think you can probably find those kinds

play28:36

of premiums right now um so I I think

play28:39

get involved get involved now buy a

play28:41

little bit at least to get your feet wet

play28:44

get that coin in your head appreciate

play28:46

what it feels like what it looks like

play28:48

and uh I think you'll be sold and and

play28:50

start building on it um yeah someone

play28:53

pointed out actually a subscriber

play28:54

pointed out to me something interesting

play28:56

and I'm not suggesting people do this

play28:58

but it is an option and that is that the

play29:01

Royal Canadian Mint has its own version

play29:03

of a silver ETF and the silver is stored

play29:05

at the mint well not just their product

play29:09

but others as well will over time trade

play29:13

anywhere from you know um discount to

play29:16

net asset value to premium to net asset

play29:20

value and so this subscriber these are

play29:23

the kinds of things that I that I know

play29:24

of but I'm not constantly tracking yet a

play29:27

subscriber wrote to me and told me about

play29:29

this and said you know right now this

play29:31

product is trading at about 12% discount

play29:34

to the silver price to that for the

play29:36

silver that's actually being held by

play29:37

this ETF so I went and looked at it and

play29:40

then I told my own subscribers about it

play29:43

and I said right now that's actually got

play29:45

worse it was at 16% so worse one from

play29:49

one point of view better from the buyer

play29:51

point of view you're actually buying

play29:53

silver at a 16% discount so um you know

play29:56

these things don't tend to last

play29:58

uh that's likely to correct especially

play30:00

if you get people piling in and and you

play30:02

know Silver's making new highs new say

play30:05

20 12 or 20 24 month highs and um that's

play30:10

one way I'm not saying that's the same

play30:12

as buying physical silver there is no

play30:14

equivalent but I am saying that you can

play30:17

get exposure you can get it quickly you

play30:19

can get it you can buy something like

play30:22

that wait for it to reach uh nav or net

play30:26

asset value or wait for it to reach a

play30:28

premium to net asset value then sell it

play30:30

and switch to physical silver these are

play30:32

the kinds of things that people do kinds

play30:35

of things I talked about tactics you can

play30:37

use uh I talked about that to my

play30:40

subscribers and kinds of things people

play30:41

can take advantage of it's it's

play30:43

certainly one way to gain exposure and

play30:45

not

play30:46

overpay right and to mitigate that risk

play30:48

a little bit well like our friend Rick

play30:49

rule says he loves silver because it's

play30:51

hated so maybe not a bad strategy there

play30:54

absolutely uh the author of The Great

play30:56

silver Bull and the publisher of silver

play30:58

Focus newsletter the silver stock

play31:00

investor my friend Peter KRA joining us

play31:02

today hey thanks for coming on the show

play31:04

Breaking it down for me and the viewers

play31:06

today Jeremy always a pleasure um it's

play31:10

always fun to to chat and to to give my

play31:12

insights and hopefully I have helped to

play31:14

contribute something that um your

play31:16

viewers will will find helpful you

play31:18

absolutely did and I could have chatted

play31:20

to you all day but we'll have you on

play31:21

again soon Peter appreciate your time

play31:22

today thank you so much thank you thanks

play31:25

so much and thanks again to our viewers

play31:27

don't forget to go to kito's YouTube

play31:29

channel subscribe like that video

play31:31

believe it or not I read the comments

play31:33

and we'll see you tomorrow we'll see you

play31:34

next time I'm Jeremy saffer for Kiko

play31:37

[Music]

play31:43

[Music]

play31:55

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