While gold’s been teetering along at just under $1,750 per ounce, the price of silver has dropped considerably, sliding 2.33% in value against the U.S. dollar during the last 24 hours. Silver has lost more than 28% against the dollar during the last 165 days or since March 8, 2022. Despite the lower prices, David Morgan, the founder of The Morgan Report, believes silver is expected to see a crunch in supply. In ten years’ time, Morgan thinks silver will be one of the best investments of the decade.
David Morgan Insists the ‘Industrial Side Alone Is Probably Going to Take All the Silver’
During most of 2021 and the second half of 2022, many investors have been focused on assets like gold and bitcoin. Silver, on the other hand, has not performed as well and both silver spot prices and silver mining stocks have underperformed the S&P 500.
In February 2021, Cryptox.trade News reported on the so-called ‘silver squeeze’ sparked by anonymous cohorts on the Reddit forum r/wallstreetbets. That week, silver soared over $30 an ounce in USD value, and many precious metal dealers said they were out of stock.
In 2022, an ounce of fine silver managed to reach a high of $26.46 per ounce during the second week of March. On March 8, 2022, gold’s price 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 coasting along at $19 per ounce on Saturday evening (EST) on August 20, 2022. Despite the significant losses, the founder of The Morgan Report, David Morgan, believes silver will see a crunch in supply in the next ten years.
On August 19, 2022, Morgan discussed silver’s value with the anchor and producer at Kitco News David Lin. In the video published on Youtube on Friday, Morgan told Lin the silver supply could run dry in the future. According to data collected by the Silver Institute, the world’s silver demand will hit a record 1.112 billion ounces in 2022.
“[USGS] said that silver would be the first element on the periodic table that would 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 in time.”
The precious metals analyst added:
If you’ve got a long time horizon, like ten years or more, I can’t think of something 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 industry alone sucks up all the silver that’s available and there isn’t any left.
FX Empire Strategist Highlights a Gap in the Silver Futures Market, Analyst Expects ‘a Lot of Downward Pressure’
However, in the short term, fxempire.com’s precious metals analyst Christopher Lewis envisions silver dipping below $18 per ounce. Lewis says there’s 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 will fill the gap rather soon, perhaps down to the $18.50 level. If we break it down below there, then the $18 level is also important, as it is a large, round, psychologically significant figure, and an area where we have recently seen a lot of support.” Lewis’s 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 down below the $18.00 level, that probably kicks off the next great leg lower. In that scenario, it’s very possible that we could see silver get absolutely smoked.
Morgan Declares There Is No Silver Substitute
During Morgan’s interview, he noted that silver often stems from base metal mining and said the supply will shrink from that sector as well. “Seventy percent of silver is a result of base metal mining — If that is down, and down noticeably, then that takes a great deal of silver supply off the market,” Morgan said to Lin.
Earlier this year reports detailed that silver demand would swell by 5% this year and jewelry demand was forecast to grow 11% in 2022. Although, despite macroeconomic uncertainties from the war and the world’s inflationary pressures, silver has underperformed as a safe haven asset.
In fact, during the pandemic in 2020 merceradvisors.com’s Donald Calcagni published a scathing paper on 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 in 2022, data shows the leading crypto asset has been correlated with stocks. Speaking with Lin during his interview on Friday, Morgan suggested silver will be one of the best investments of the decade.
The precious metals analyst opined that 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 stressed during the interview. “Most silver applications are absolutely essential and irreplaceable. There is no substitute.”
What do you think about silver’s significant decline since March 8 and the recent 24-hour losses? What do you think about David Morgan’s opinion about the future value of silver? Let us know what you think about this subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
