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Has Silver Bottomed?

Mike Maroney


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IMPORTANT NOTE: The information presented in these video clips is solely a highlight of the opinion of a third-party and is incomplete. Please visit the website and/or subscribe to the publication for the full and timely opinion of the individual and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Video Transcript

Mike Maroney: Good afternoon! It's Wednesday, July 25th. My name is Mike Maroney and we're doing our Silver Centric video, today. Let's talk about silver.

We've seen a lot of activity in the silver market as last week we went down and tested the interday low of July of 2017, right at that $15.14-$15.20 area. Right there, we saw strong buying and the market has bounced all the way back up to $15.60-$15.65, today, a $.50 move off the lows. The question investors are asking is, "Has silver put in a bottom?" Well, let's look at what's happened over this decade. Silver hit a high of almost $50 in 2011. Then, we pulled all the way back down to $13.54 in December of 2015. Many people believe that $13.54 area represents what we call, "equilibrium," which is basically the cost to produce. We haven't seen that price broken and after we saw silver trade as low as $13.54, we saw a tremendous rally to the upside, and we hit a high of $21.35. Now, since that point, we've been trading in a fairly tight range, between $15.80 and $17.80, but last week were fortunate enough to see silver break that $15.80 support and come all the way back down and test that July low from 2017, right at $15.14. The question is, "Where are we headed and what will happen based on the two events that are taking place in the next week?" One, we have GDP numbers being released on Friday. Some experts believe that that will come in somewhere between 4 to as high as 5.5%, a number we haven't seen in years. If that's the case, the dollar could potentially rally and maybe just maybe we might get another opportunity to buy silver down in that $15.15-$15.20 area or potentially even a little bit lower. Then, on Wednesday of next week, we have the Federal Reserve. They're fully expected to raise rates a quarter of one point and in recent speeches by the Fed Chairman Powell, he's insinuated that there will be one more rate increase in the not so distant future. Now, why are they raising rates? Why, because they realize that inflation is upon us and if you look at the situation that exists in the world today, we are a wash with debt. The U.S. is expected to spend $890 billion more than they take in this year, and a trillion dollars next year, and a trillion dollars the year after. We're already at $21 trillion. Corporate debt has just hit a record high of 76% of GDP. We have a trillion dollars in student loans and the dollar right now is trading at about 94, 95 after hitting a low of 78, four years ago. Many people believe that the dollar is in trouble and we will see those lows from four or five years ago retested. What will happen to the price of silver then? Well, I guess we will have to wait and see, but when you look at today's price and you think about the fact that we're trading very close to equilibrium, doesn't it make sense to diversify a portion of your portfolio and own one of the undervalued assets that exists out there in portfolio world? Give us a call today. So, we can talk to you about investing in precious metals to see if it's right for your individual portfolio. Thank you.