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

Summary

In 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.