Is Silver the Most Undervalued Commodity?
Mike Maroney: Good afternoon! It's Wednesday, August 1st. My name is Mike Maroney coming to you today from the Monex Precious Metals Studio. Let's do our Silver Centric video.
Today, we had a very interesting day, because the Fed made an announcement. Now, some people expected that we would see a quarter of a point, but last night most of the major firms came out and basically stated that a quarter of a point wasn't in the cards for today, but would probably happen in September. Sure enough, the Fed left interest rates alone and it looks like September and December will be the time that they would have to raise in order to get two more increases before the end of the year. The bottom line right now is, many people look and say, "Maybe President Trump was effective in slowing down the Fed," but the reality of this situation is really quite simple. If the dollar continues to rally, the massive amount of dollar lending that is taking place around the world through the emerging markets could throw the entire world economy into a tailspin and that is the last thing the Federal Reserve wants to actually facilitate. So, they have to be very careful as far as their tightening process is concerned and try to keep the dollar in check from breaking above its recent highs at around $95.50.
So, what is in store for silver? We have seen a recent low in silver right down around $15.15 spot, which is the lowest level that we've seen over the last 10 years, except for the two dips that we had in December of 2015 and December of 2016. Both of those dips, we basically saw nice rallies back to the upside. One time, we got as high as $21. The next time, we got as high as $18. If you look at the overall demand situation for silver and think about all of the uses and the basic cost to produce, as far as hard rock silver mining, you would have to say owning silver anywhere between $14.15 and $15.50, if you have the wherewithal to hold this product, you should do very well. And... If we start to deal with the issues that many people believe are inevitable, as far as currency devaluation, silver may end up being one of the best investments on the board over the next five to ten years.
Give us a call here at Monex. So, we can explain the nuances that exist as far as owning silver. You can own physical silver--take delivery, you can own physical silver and have it stored, and you can even trade in silver based on the volatility that takes place. There are many different types of opportunities. Give us a call today, here at Monex. Thank you.