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While gold has fallen to just under $1,750 an ounce, the price of silver has fallen considerably, shedding 2.33% against the US dollar in the last 24 hours. Silver has lost more than 28% against the dollar in the last 165 days or since March 8, 2022. Despite the lower prices, David Morgan, founder of The Morgan Report, believes that silver is expected to see a decrease in supply. In ten years, Morgan believes silver will be one of the decade’s best investments.
During most of 2021 and the second half of 2022, many investors have been focused on assets such as gold and bitcoin. Silver, on the other hand, has not performed as well, with both silver spot prices and silver mining stocks underperforming the S&P 500.
In February 2021, Bitcoin.com News reported on the so-called “silver squeeze” triggered by anonymous cohorts on the Reddit forum r/wallstreetbets. That week, silver rose above $30 an ounce in USD value, and many bullion dealers said they were sold out.
In 2022, an ounce of fine silver managed to hit a high of $26.46 per ounce during the second week of March. On March 8, 2022, the price of gold per ounce hit a new lifetime high as it traded above the $2,070 range.
Silver has lost more than 28% in value since March 8, as it is currently trading at $19 an ounce on Saturday evening (EST) August 20, 2022. Despite the significant losses, The Morgan Report founder David Morgan , believes silver will see a crunch in supply over the next ten years.
On August 19, 2022, Morgan discussed the value of silver with Kitco News anchor and producer David Lin. In the video published on Youtube on Friday, Morgan Lin said that the silver supply may run dry in the future. According to data collected by the Silver Institute, world demand for silver will reach a record 1.112 billion ounces in 2022.
“[USGS] said silver would be the first element in the periodic table to be in such short supply, and that was a few years back, Morgan detailed. “Just the industrial side alone is probably going to take all the silver available at some point.”
The precious metals analyst added:
If you have a long time horizon, like ten years or more, I can’t think of anything that would be better than a silver investment. Silver will shine at some point… but it’s probably going to take a natural corner… a natural corner is when the industry alone soaks up all the silver available and there’s nothing left.
In the short term, however, fxempire.com precious metals analyst Christopher Lewis sees silver falling below $18 an ounce. Lewis says there is a gap in the silver futures market and he believes the gap will be filled in the near future.
“At this point, it looks like we’ll close the gap pretty soon, maybe down to the $18.50 level. If we break down there, then the $18 level is also important because it’s a big, round, psychologically significant figure, and an area where we have recently seen a lot of support.” Lewis’ technical analysis report continues:
Ultimately, this is a market that I think continues to see a lot of downward pressure, and if we can break below the $18.00 level, that will likely kick off the next big leg lower. In that scenario, it is very possible that we could see silver get completely smoked.
During Morgan’s interview, he noted that silver often originates from base metal mining and said that supply will also shrink from that sector. “Seventy percent of silver is a result of base metal mining — if it’s down, and down noticeably, then it’s taking a lot of silver supply out of the market,” Morgan told Lin.
Earlier this year, reports detailed that silver demand would swell by 5% this year and jewelery demand was projected to grow by 11% in 2022. Although silver, despite macroeconomic uncertainty from the war and world inflationary pressures, has underperformed as a safe haven.
In fact, during the 2020 pandemic, merceradvisors.com’s Donald Calcagni published a scathing paper about how “silver has not been a consistent hedge against inflation or a stable, reliable store of value.” The same has been said about gold this year as research shows that gold has “an extremely low correlation to inflation”.
Bitcoin (BTC) has also shown a low correlation to inflationary pressures, and by 2022 data shows that the leading crypto asset has become correlated with stocks. Speaking to Lin during his interview on Friday, Morgan suggested that silver will be one of the best investments of the decade.
The precious metals analyst said he believes the industrial world will always demand silver. “Nothing reflects light as well as silver, and nothing conducts electricity as well as silver,” Morgan emphasized during the interview. “Most silver applications are absolutely essential and irreplaceable. There is no substitute.”
What do you think of silver’s significant decline since March 8 and the recent 24-hour losses? What do you think of David Morgan’s opinion on the future value of silver? Let us know what you think about this topic in the comments section below.
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