In a recent interview, global trading director of Kitco Metals Peter Hug gave some insights into the broader market and what precious metals investors can expect moving forward. Hug noted that gold, like the equity market, has seen little in terms of price movement over the past few weeks. While there is plenty of uncertainty that would normally push gold higher, investors appear to be bracing for either a triggering event or a price dip that would bring buyers in.
Comparing silver to gold, Hug noted that both metals have demonstrated strong support at their respective levels of $24 and $1,850. Hug pointed out that silver’s dips to the $24 level quickly attracted investors, which is just one of the metal’s many bullish prospects.
Silver’s supply tighter than gold’s
Being primarily obtained as a byproduct from prospecting other metals, silver’s supply picture is even more lacking than that of gold. Hug believes the silver market might not necessarily be ready for another bout of massive demand, especially the kind seen in March and April, when investors around the globe initiated a bullion frenzy. With a year or two necessary to ramp up silver production in any significant way, Hug pointed out that there is a lag window that could cause a spike in silver prices should investors come flocking once again.
While these investors could come in the form of retailers and institutions looking for coins and bars, demand could just as easily pick up from manufacturers looking to ramp up their operations after what is undoubtedly the worst year for the manufacturing sector in recent memory. Calls for an economic recovery have been reverberating for months, and despite the threat of more lockdowns, another multi-trillion-dollar stimulus could be brewing. This has both sparked inflationary concerns and spurred expectations that industrial demand for silver will see a significant pickup.
Gold-to-silver ratio points to “historic correction to the upside”
For the whole of the 20th Century, the average gold-silver ratio was 47:1. The current gold-to-silver ratio is so far off historic norms that many experts to predict a historic correction to the upside for silver.
With the likelihood of an accommodative Federal Reserve policy for at least another year, Hug finds both gold and silver’s fundamentals to be on solid ground. Hug expects gold to return to the $2,000 level and test new highs by the end of Q1 2021. Given silver’s resilience around $24 and the combined tailwinds of higher inflation and heightened industrial demand, Hug thinks that a roughly 10% gain in gold prices would push silver higher exponentially higher. Should another influx of buyers materialize in the near-term, Hug doesn’t find it a stretch for silver to move onwards to $35-$40 by the end of the first quarter.
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Heard it before… yawn.
The amount of stimulus required in 2021 should be positive for metals even while its manipulated. But guessing when the manipulation will end is like predicting Jesus second coming. However, we could be close for both. Amen
This speculation is old hat and been pushed off’n on over the years. The push is to cause panic and bring in buyers to the metal markets.
I’ve been buying metals for years, and not an ‘expert’ but an observant buyer/seller. Metals have been relatively flat across the board for several months now. When events happening that have a global significance, ie a potential war in an oil rich nation, then the markets react. National events can also affect markets, ie and election. This is all elementary stuff that even non-‘experts’ can watch and track.
IMO, the markets are in a wait’n see state right now with the US election results still being worked out. Reders Digest version, IF the election is stolen and Biden is President, expect gold buying to explode and prices will soar. Buying gold at a Biden confirmation will be very profitable as people will seek to protect their wealth and make large profits as well.
If Trump is confirmed re-elected, then expect metal prices to drop as money moves out of metals and back into the stock markets, industrial investments and employment/wage growths. The time to buy metals is when this re-investment bottoms out more or less.
With the huge increases in debt, both globally and nationally, people should have some REAL gold or silver on hand, not certificates. ALL debts have to be repaid. The debt is unserviceable and will eventually collapse the economy. Fiat money will be utterly useless, think Germany 1940’s or present Venezuela or Zimbabwe. In order to protect your wealth buying metals is not only good but a wise idea. Its easily bought, sold and traded and no govt requirement to report it.
Like any investment… use your head and not the emotional induced buy now
Going long with physical PMs with dip buys and rare peak sells has always been one of my core strategies since my first Silver purchase in 1983.
Silver and Gold aren’t the only hard assets in my quiver, been in stocks, bonds (100% out of these now – avoided all crashes – out early – back in late) real-estate, and still run a small internet based business as well…however my steadily accumulative PM dip buys, rare peak sells, have turned out to be my most successful long term strategy.
I’m building a fortress off grid house and recently sold a large amount of Gold for the last payments to the builder. Most of what I sold I recently bought during the big dip last March with reserved/saved house fiat…it was a gamble that really paid off…I also went into my 2015 dip bought Gold stash (bought at a $1,100 an oz. and took profit at over $1,900 an oz.)…then I went into some of my 1999 stash I bought at the $280 dip of the decade…that was some serious profit.
I don’t know when, but the game of musical chairs with ‘paper’ Gold & Silver is winding down…when the music finally stops there will be wailing and gnashing of teeth if you are in paper PMs and not in physical PMs.
NEW SURVEY REVEALS 12% OF THE AMERICAN POPULATION OWNS GOLD, WHILE 14.7% OWNS SILVER
https://www.prnewswire.com/news-releases/new-survey-reveals-12-of-the-american-population-owns-gold-while-14-7-owns-silver-300942963.html
The third PM Bull market since the 1971 PM free for all started is well underway…the Great Reset Screwing is looming (It will be great for the .0001% Luciferian Globalists Banksters – a disaster for ‘Them the Sheeple’) silver is still super suppressed, still the best hard asset available on the planet. The current ratio of Silver to Gold will be eventually corrected to the favor of Silver in the 2020s, I suspect sooner rather than later.
Always been a go long macro guy, but at my age and stage most of my PMs will be legacy generational wealth…one form of protection for my family in the coming storms.
https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
https://www.macrotrends.net/1470/historical-silver-prices-100-year-chart
Been doing very much the same thing. Injuries forced me into ‘retirement’ so had to come up with alternative means for income.
I agree and have used to great benefit the buy/sell of the metals I invest in as well, not just gold/silver but also platinum and palladium. Did nearly the same as you did Mark when just this summer I took some gold and cashed in for real estate, the cash in was for a 30K profit over purchase, and still no debts.
Real estate is the other better investments, as you mentioned. We bought, upgraded then sold when the market was better for us to make a dollar. Its a longer term invest and not easily liquitable but far safer and profitable if a person is patient and buys smart. We worked out way out of mortgages and have a healthy balance in savings and other assets.
Should a SHTF event ever occur, and debt load now makes that a greater reality, you can use gold and silver to buy and trade with. Fiat currencies will be worth
while but only for toilet paper, unless you were a scamdemic believer and have a garage full of TP. If you own land… you can grow a garden, raise some chickens and reduce your need to compete for supplies.
To those that don’t prepare, I’m often surprised how many have the “it’ll never happen here” mentality. Talk to anyone who has fled a communist regime or communist takeover. They too had the same mentality and lost everything escaping. Some prep is better than nothing.
Mark, do you know of any options of selling physical silver other than selling it back to one of the dealers (gainesville, gmbullion, etc). When buying bullion, you pay a heavy premium over spot, but when you sell it back to these dealers, they will only pay $1 or so over spot. One needs to see very significant spot price increases in order to just break even on a buy/sell with a dealer.
Maybe I can help answer that. Its obvious that bullion dealers earn their money by buying and selling bullion based on premiums. Its up to you to find a broker whose premiums you can live with. Also note that metals are not a short term buy/sell commodity when dealing in small dollar values as the premiums will eat your profits.
The metal market is better suited to a longer term security/investment. Unless you are buying in the millions and then you wouldn’t be here asking. So if you are looking for quick buy/sell wealth building then metals is likely not what you want. If you are looking for longer term profit building them metals can work for you, like real estate.
I agree Brian.
I started stacking at 33…will be 71 on Pearl Harbor Day. The only thing I would go back and do different…is buy more during the dips.
As a long time serious Prepper…considering what is hurtling towards us like a frigg’in giant Luciferian Globalist Commie astroid, after all the common sense PREP is secured I would put what ever I could into Silver…some into Gold if there is some wealth.
That’s funny. I mean, NOT funny as in haha haha, but . . . er . . . nevermind. Just the vodka talkin’ 🙂
youknowwhoiam,
All I know is the simplistic ‘PHYSICAL’ method I have used since the early 80’s which is stacking during obvious dips, holding and building…never using monies I may need so I could stay long, and until fairly recently only selling with significant long term profits.
Since 2008 here is where I have made the vast majority of my purchases.
http://www.coloradogold.com
After Don (the founder) retired I used his son David, and have been extremely pleased with the service, and our relationship. They are a small forty year old, multiple generation, rock solid family company.
Don’s free newsletter is also excellent.
They buy back what they have sold to you at no fee.
Have made about 30 purchases with Colorado Gold, have had three sales to date…all fully insured, no problems to date, except some scratches on some gold coins from my end…be careful with them.
Note: Until the exposed 21 Trillion Federal fraud (the tip of the iceberg) a couple three years ago I never expected to have this much time to stack. Below explains how they have delayed the day of reckoning. I was convinced we as a nation would be where we are soon headed under Obama, so I went in heavy in PMs during the Petulant One’s second term…besides a PM killing made in 1999. I am reaping those Obama second term PM purchases/profits today.
Thanks Bathhouse Barry! (I also own 10 extra guns and 10k extra rounds because of him, and I was armed to the teeth before that traitor was elected the first time.)
https://missingmoney.solari.com/missing-money-update-may-2020/
If it turns out to command value .gov will demand it/
national security don’t you know