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Key Industrial Commodity on the Brink of Breakout?

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 Thursday, October 4th. My name is Mike Maroney. I am coming to you today from the Monex Precious Metals Studio. We're going to do our Silver Centric video today.

Back in June, silver was trading at $17.80 and a lot of people thought that we could see $20.00 silver, but what happened was the trade war began, the dollar rallied, and commodities across the board sold off. Silver pulled from $17.80 all the way down to $13.80, a four dollar drop. Now, whenever you get below $14, you're in what we call, "The equilibrium zone," and what that is... is basically the cost to produce and turn the silver into silver bars, good delivery bars. Most people believe the number on that is somewhere between $12.75 to $14.00. So, whenever you get into that equilibrium zone, you know as long as you have the wherewithal to hold the position and once the metals markets heat up, silver has a tendency to over shoot back to the upside.

So, there's two questions a lot of people are asking. Is silver divesting itself from gold? Because we, one... we're trading at about an 85-86 to 1 ratio, but that's changing dramatically--as silver seems to be breaking out and gold seems to be languishing. Now, remember the CRB has moved higher. It's rallied from $190 all the way back up to $207. We saw oil yesterday trade as high as $76. We saw copper rally from $260 all the way to $285. It's no wonder silver is rallying, because remember, silver is one of the key industrial commodities in the world today. So, the bottom line is when you look at silver, yes, it's typically attached to gold or the precious metals market, but there will be times that it will trade on its own volition. And quite frankly, when you have an opportunity to buy silver below $14.00 and you have the wherewithal to hold it, a lot of people look at that and say it's like buying $20.00 bills at a 70% price, and quite frankly, I believe that could be the case. In the not so distant future, $20.00 silver seems to be well within the realm of possibility, and I believe, somewhere in the next four to five years, we could see $50.00 silver once again. But now, may be the time to look at diversifying your portfolio into an undervalued asset that's both precious metal and industrial commodity. Give us a call today. So, we could explain the opportunity to you for your individual portfolio. Thank you.