Analyst Says if Silver Dips Below $18, Precious Metal Could ‘Get Absolutely Smoked’ — Morgan Report Founder Expects a Supply Crunch

While gold’s been teetering alongside at just below $1,750 per ounce, the worth of silver has dropped significantly, sliding 2.33% in worth in opposition to the U.S. greenback over the last 24 hours. Silver has misplaced greater than 28% in opposition to the greenback over the last 165 days or since March 8, 2022. Despite the decrease costs, David Morgan, the founding father of The Morgan Report, believes silver is predicted to see a crunch in provide. In ten years’ time, Morgan thinks silver will probably be among the best investments of the last decade.

David Morgan Insists the ‘Industrial Side Alone Is Probably Going to Take All the Silver’

During most of 2021 and the second half of 2022, many buyers have been targeted on belongings like gold and bitcoin. Silver, alternatively, has not carried out as nicely and each silver spot costs and silver mining shares have underperformed the S&P 500.

In February 2021, Bitcoin.com News reported on the so-called ‘silver squeeze’ sparked by nameless cohorts on the Reddit discussion board r/wallstreetbets. That week, silver soared over $30 an ounce in USD worth, and plenty of valuable steel sellers mentioned they had been out of inventory.

In 2022, an oz. of effective silver managed to achieve a excessive of $26.46 per ounce in the course of the second week of March. On March 8, 2022, gold’s worth per ounce hit a brand new lifetime excessive because it traded above the $2,070 range.

Silver has misplaced greater than 28% in worth since March 8, as it’s at the moment coasting alongside at $19 per ounce on Saturday night (EST) on August 20, 2022. Despite the numerous losses, the founding father of The Morgan Report, David Morgan, believes silver will see a crunch in provide within the subsequent ten years.

On August 19, 2022, Morgan mentioned silver’s worth with the anchor and producer at Kitco News David Lin. In the video printed on Youtube on Friday, Morgan informed Lin the silver provide might run dry sooner or later. According to data collected by the Silver Institute, the world’s silver demand will hit a file 1.112 billion ounces in 2022.

“[USGS] mentioned that silver could be the primary ingredient on the periodic desk that will be in such brief provide, and that was just a few years again,” Morgan detailed. “Just the commercial facet alone might be going to take all of the silver out there in some unspecified time in the future in time.”

The valuable metals analyst added:

If you’ve acquired a very long time horizon, like ten years or extra, I can’t consider one thing that will be higher than a silver funding. Silver will shine in some unspecified time in the future … however it’s in all probability going to take a pure nook … a pure nook is when business alone sucks up all of the silver that’s out there and there isn’t any left.

FX Empire Strategist Highlights a Gap within the Silver Futures Market, Analyst Expects ‘a Lot of Downward Pressure’

However, within the brief time period, fxempire.com’s valuable metals analyst Christopher Lewis envisions silver dipping beneath $18 per ounce. Lewis says there’s a gap in the silver futures market, and he believes the hole will probably be stuffed within the close to future.

“At this level, it seems like we’ll fill the hole somewhat quickly, maybe all the way down to the $18.50 degree. If we break it down beneath there, then the $18 degree can be vital, as it’s a massive, spherical, psychologically important determine, and an space the place we now have not too long ago seen a whole lot of help.” Lewis’s technical analysis report continues:

Ultimately, this can be a market that I feel continues to see a whole lot of downward strain, and if we are able to break down beneath the $18.00 degree, that in all probability kicks off the subsequent nice leg decrease. In that situation, it’s very doable that we might see silver get completely smoked.

Morgan Declares There Is No Silver Substitute

During Morgan’s interview, he famous that silver typically stems from base metal mining and mentioned the provision will shrink from that sector as nicely. “Seventy p.c of silver is a results of base steel mining — If that’s down, and down noticeably, then that takes a substantial amount of silver provide off the market,” Morgan mentioned to Lin.

Earlier this yr reports detailed that silver demand would swell by 5% this yr and jewellery demand was forecast to grow 11% in 2022. Although, regardless of macroeconomic uncertainties from the conflict and the world’s inflationary pressures, silver has underperformed as a protected haven asset.

In reality, in the course of the pandemic in 2020 merceradvisors.com’s Donald Calcagni printed a scathing paper on how “silver has not been a constant hedge in opposition to inflation or a secure, dependable retailer of worth.” The similar has been mentioned about gold this yr as research exhibits that gold has “an especially low correlation to inflation.”

Bitcoin (BTC) has additionally proven a low correlation to inflationary pressures and in 2022, data shows the main crypto asset has been correlated with stocks. Speaking with Lin throughout his interview on Friday, Morgan urged silver will probably be among the best investments of the last decade.

The valuable metals analyst opined that he believes the commercial world will at all times demand silver. “Nothing displays gentle in addition to silver, and nothing conducts electrical energy in addition to silver,” Morgan burdened in the course of the interview. “Most silver functions are completely important and irreplaceable. There isn’t any substitute.”

What do you concentrate on silver’s important decline since March 8 and the latest 24-hour losses? What do you concentrate on David Morgan’s opinion concerning the future worth of silver? Let us know what you concentrate on this topic within the feedback part beneath.

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