Should Investors Shift Their Focus to Silver in 2024?

Sean Brazney: Hello, my name is Sean Brazney, Sales Director for Monex Deposit Company. I have the great pleasure of being here again with Jeffrey Christian, Managing Partner and Founder of CPM Group, commodities research firm. Thank you so much for being with us again today, Jeffrey.

Jeffrey Christian: It’s always a pleasure to be with Monex and you personally. You always ask the right questions at the right time.

Sean Brazney: Sometimes, you hit the right pulse at the right time. We talked about this on email before we got here, of course, and one thing that comes up a lot recently was this run up in gold. We hit a $2,570, I think, all-time record setting high and silver just didn’t seem to join the party. The volume was low. We got up there near 30’s again, but it just didn’t seem to catch fire like gold did. I’m really curious as to your take on the data as to why that may not have happened.

Jeffrey Christian: I think there are two main factors. The first one is that gold is much more universally seen as a financial asset and a hedge against various uncertainties: inflation, currency market volatility, political uncertainties, and dysfunctionality. So, I think gold is seen a lot greater demand in more parts of the world.

But the other factor is that, there were any number of people who got sucked into silver too early, with the Wall Street silver, and the silver conspiracy stuff, and let’s drain the COMEX and London inventories, and they were buying silver at higher prices. Then the price came back up, because none of that panned out, because it was Israeli, to be honest, nonsensical. So, you’ve got some disenchanted investors who have been selling silver. Now, I’m sure Monex has seen it. Other people have seen it. Demand for silver from investors has been pretty healthy on a gross basis this year. There’s a lot of investors who have been buying silver, but there are other people who had bought at 29 and 30 and then when you add the premiums 30, 32, 33 back in 2021 and they’ve been selling silver. So, if you look at gross silver demand from investors, it’s been healthy, but if you look at it on a net basis, taking into account that there are other investors who have been selling, investment demand for silver on a net basis has been low. Until those investors that are selling stop selling, and I think that we’re probably getting close to the point where they will, you’ll see silver lagging. Once they stop selling, you’ll see silver prices rise and I’ll point out that if you look at the past two times when silver rose sharply, 1979 into January 1980, when it went from $5 to $50, and then 2005 really until 2011 when it went from $5 to $50. In both of those times, you saw the first trigger, the end of investors selling after a long period of investor selling, that’s what really started it. Once those investors stop selling, then the gross purchases start pushing prices higher. Then you see more investors coming in as buyers and the silver price rises. So, our expectation is silver prices will catch up and they’re being held back by that disenchanted investors who had bought silver four years ago, expecting much higher prices.

Sean Brazney: When I look at the difference in prices, you see gold where it’s at now. You see a lot of price targets up there in the $2,660’s. In fact, I have a technical target maybe north of $2,660. From this point, that’s maybe a 4% gain, but when you look at silver, on the silver upside here, you get a $3 move and silver seems real easy. It puts you at about 10%, 10% plus on a return. With kind of where we are in prices right now and after this big run up in gold, would you say it’s probably time to maybe shift some of your focus to silver here for maybe the remainder of this year going into next year?

Jeffrey Christian: Exactly. I mean, if you– a CPM group has quarterly price projections and our expectation is that the gold price is probably going to rise about 4% in the fourth quarter of this year. It’s already risen to record levels, as you said, but maybe another 4% increase in the quarterly average price of gold in the fourth quarter of this year and 5% in the first quarter of next year.

But if you look at our silver projections, we’re looking at 9.8% increase in silver in the fourth quarter on a quarterly average basis, much greater on a daily basis, and another 10% in the first quarter. So, we see silver really running higher playing catch up, if you will, increasing probably at twice the rate of gold prices over the next seven months.

Sean Brazney: Well, again, we’re here with Jeffrey Christian, the author of our, 2024 Precious Metals in a Rising Storm. Highly recommend you call Monex today. Talk to an account representative and get your free report today.

Thank you for being with us today, Jeffrey.