Peter Krauth - Silver Market May Be Tightening More Than We Know (Opinion)
Summary
Optimism surrounds silver's recent price action, with the precious metal nearly doubling gold's returns over the past month and a half. This surge appears driven by large industrial users standing for delivery on long futures contracts while also scooping up silver ETFs and exchanging their units for physical metal. As a result, major exchanges like the LBMA, COMEX, and Shanghai have seen their silver inventories drawn down by approximately 40% over the last 3 years. At the current feverish pace of demand outstripping supply, these secondary stockpiles could be depleted within just 12-24 months.
A $300 silver price projection has been outlined in Peter Krauth's book "The Great Silver Bull." This lofty target is derived from analyzing the historical gold/silver ratio peaks, the ounces required for purchasing an average home, and accounting for higher future inflation rates. While not expected to remain permanent, $300 represents a potential peak mania price that would wreak havoc on industrial users facing those levels. However, silver's prospects for outperformance in the coming years remain incredibly bullish as available inventories continue being voraciously consumed. The setup signals the early stages of a powerful secular bull market.
Timestamps
0:00: Silver market dynamics influenced by industrial users, ETFs, and physical metal exchange.
4:34: Silver price expected to reach $28 before long, with potential to hit $30 in the second half of the year.
8:32: Silver market facing ongoing deficits despite lack of price reaction due to potential stockpile drawdown.
12:47: Potential depletion of silver inventories in 12-24 months could lead to price surge.
16:54: Silver market showing signs of tightness with increased demand from China and limited supply.
21:36: Silver market projected to face significant deficits, urging investors to consider it for investment purposes.
25:35: Signs of big money moving into undervalued mining sector, particularly silver.
30:08: Potential silver price projection based on historical gold-silver ratio and peak gold price.
34:44: Silver market potential upside surpasses gold in bull markets, supported by quality research.
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SBTV features interviews and analysis from experts and commentators in the precious metals industry. The channel aims to educate viewers on gold, silver, platinum, palladium and the economic/investment factors impacting these markets.
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