Silver Squeeze?

[C-Note]

As a silver play, I'm adding to my position in First Majestic Silver (AG). I wrote about the company here.

As a gold play, I'm adding to my position in the Sprott Physical Gold Trust (PHYS).

A good ETF is SILJ - ETFMB Prime Junior Silver Miners. That ETF holds stock in AG and bunch of other silver miners, including Hecla, Fortuna, Endeavor, and Silvercorp. Some of its holdings (such as Capstone) also produce copper, because copper and silver are often located together in the same ore. So, that ETF also gets you some exposure to copper, which is at the lowest price it has been since November 2020. I bought some more shares of SILJ today.

 

[Australia Sucks]

I own a modest amount of Silver. But long-term the problem I have with it is that industrial demand is a big percentage of the total demand. And in many industrial applications silver is substitute-able for other metals.

For example in terms of usage in healthcare for its anti-bacterial properties, copper is also anti-bacterial and anti-viral and I would argue its more effective in most cases and its much cheaper....

In terms of usage as a conductor metal in electronics if the price goes high enough they will retool manufacturing and replace with a different metal and so on and so forth.

There are very few industrial applications were if the silver price goes high enough it can't be substituted for something else. I think if Silver goes to $150 or even $100 per ounce there will be a lot of industrial demand destruction

 

[bucky]

I laugh when I check the spot price - it's truly comical at this point. I still believe that the plans the greenies have, and thus higher demand for silver, must eventually reflect more of reality at some point. Who knows when though.

I've been thinking this about silver for decades now. Aside from that little spike where it went up to around $50 about twelve years ago though, it never happens. As much as it seemingly makes no sense logically, I no longer believe in my heart that silver will ever really go anywhere, at least not in my lifetime.

 

[C-Note]

I've been thinking this about silver for decades now. Aside from that little spike where it went up to around $50 about twelve years ago though, it never happens. As much as it seemingly makes no sense logically, I no longer believe in my heart that silver will ever really go anywhere, at least not in my lifetime.

I think there is something to that argument. However, there are some items, like photo film (still used in some industries) in which silver is still the best material, if I understand correctly. Also, traditionally, when the price of gold goes up dramatically, some investors will switch to buying silver, which is why the price of silver usually follows the price of gold in a commodities bull market. So, if the price of gold hits $2500 next year, which many of us are hoping for, then silver should get a bump also, even if its use in manufacturing isn't increasing by a significant amount.

 

[EndlessGravity]

I've been thinking this about silver for decades now. Aside from that little spike where it went up to around $50 about twelve years ago though, it never happens. As much as it seemingly makes no sense logically, I no longer believe in my heart that silver will ever really go anywhere, at least not in my lifetime.

I think there is something to that argument. However, there are some items, like photo film (still used in some industries) in which silver is still the best material, if I understand correctly. Also, traditionally, when the price of gold goes up dramatically, some investors will switch to buying silver, which is why the price of silver usually follows the price of gold in a commodities bull market. So, if the price of gold hits $2500 next year, which many of us are hoping for, then silver should get a bump also, even if its use in manufacturing isn't increasing by a significant amount.

It's really not complicated. As I've said elsewhere here, we're in a deflationary environment and just went through the "pump" phase of the regular pump and dump that's done on the public. They always push gold and silver to the plebs during these times but these are not the times to buy.

I also warned against buying gold and silver as an investment over the past 2 years, although if you have the cash it's good as long term insurance or if you're making shorter term plays it's fine too. That said it would have been wiser to buy silver many years ago.

 

[president]

It's really not complicated. As I've said elsewhere here, we're in a deflationary environment and just went through the "pump" phase of the regular pump and dump that's done on the public. They always push gold and silver to the plebs during these times but these are not the times to buy.

I also warned against buying gold and silver as an investment over the past 2 years, although if you have the cash it's good as long term insurance or if you're making shorter term plays it's fine too. That said it would have been wiser to buy silver many years ago.

It's never a bad time to turn your fiat into PMs, using DCA method.

In fact, it would be my top financial tip for any investor looking at a long term time horizon. That and stacking cash to (later) buy distressed but high quality dividend paying companies that our country relies on. PMs still my top pick though.

We all know that the coming years will be primarily about capital preservation and not appreciation.

 

[zoom]

I own a modest amount of Silver. But long-term the problem I have with it is that industrial demand is a big percentage of the total demand. And in many industrial applications silver is substitute-able for other metals.

For example in terms of usage in healthcare for its anti-bacterial properties, copper is also anti-bacterial and anti-viral and I would argue its more effective in most cases and its much cheaper....

In terms of usage as a conductor metal in electronics if the price goes high enough they will retool manufacturing and replace with a different metal and so on and so forth.

There are very few industrial applications were if the silver price goes high enough it can't be substituted for something else. I think if Silver goes to $150 or even $100 per ounce there will be a lot of industrial demand destruction

Your statement on copper and it's anti-bacterial properties has merit. It's possible that in the future copper could replace silver as an anti-bacterial metal. But for electronics and other industrial applications, silver will not be replaced. Silver will be needed for electronics, solar panels, and electric cars. You could substitute silver for gold, platinum, or palladium but those metals are much more expensive.

I've been thinking this about silver for decades now. Aside from that little spike where it went up to around $50 about twelve years ago though, it never happens. As much as it seemingly makes no sense logically, I no longer believe in my heart that silver will ever really go anywhere, at least not in my lifetime.

I don't believe that the price can be manipulated long-term. It comes down to basic arithmetic. Around one billion ounces of silver are used in industry each year, and around 850 ounces are mined each year. The price has to rise. So it's not a matter of if, but when.

 

[bucky]

Your statement on copper and it's anti-bacterial properties has merit. It's possible that in the future copper could replace silver as an anti-bacterial metal. But for electronics and other industrial applications, silver will not be replaced. Silver will be needed for electronics, solar panels, and electric cars. You could substitute silver for gold, platinum, or palladium but those metals are much more expensive.



I don't believe that the price can be manipulated long-term. It comes down to basic arithmetic. Around one billion ounces of silver are used in industry each year, and around 850 ounces are mined each year. The price has to rise. So it's not a matter of if, but when.

You could be right. I hope you're right. It would be nice if my modest hoard were to...what are we talking about, double, triple or more...in value. But I've been hearing stuff just like what you just said for well over 25 years now and I'm not holding my breath.

 

[Robert High Hawk]

You could be right. I hope you're right. It would be nice if my modest hoard were to...what are we talking about, double, triple or more...in value. But I've been hearing stuff just like what you just said for well over 25 years now and I'm not holding my breath.

Sadly I gotta agree with this sentiment, and not with any joy at all.

Silver has been utterly, utterly disappointing, and it has to make incredible moves just to get a lot of people back to even.

Sure that's the same with bitcoin, but bitcoin is very volatile, historically to the upside. Silver has just been slowly depressing just to watch and own over the last several years.

Lest I be called a hater, I own the phyzzz. I just buy a lot less than before.

 

[president]

Sadly I gotta agree with this sentiment, and not with any joy at all.

Silver has been utterly, utterly disappointing, and it has to make incredible moves just to get a lot of people back to even.

Sure that's the same with bitcoin, but bitcoin is very volatile, historically to the upside. Silver has just been slowly depressing just to watch and own over the last several years.

Lest I be called a hater, I own the phyzzz. I just buy a lot less than before.

Hold tight guys. Keep buying. Buy more.

Silver and gold are stores of value, not money makers. Silver being more volatile than gold, it's important to be patient for dips.

The timeline on this is still very long and it's a blessing that it's still low, but when the CBDC iron curtain comes down and comes down hard, you will see the unofficial black market price for PMs explode. This could take another 10-15 years. Just my humble opinion.

 

[president]

The sham of paper gold and the price fixing by the BIS bank of international settlements:

 

[C-Note]

You could be right. I hope you're right. It would be nice if my modest hoard were to...what are we talking about, double, triple or more...in value. But I've been hearing stuff just like what you just said for well over 25 years now and I'm not holding my breath.

Well, this is why I believe diversification is just as important with metals investing as it is with securities. It could be that manufacturers will replace silver with copper and other metals in their products. So, invest in copper and other metals also. It stands to reason that different metals will jump in price at different times, for different reasons. So, be diversified.

 

[Robert High Hawk]

Q Anon told me it's just a matter of time before they arrest all the price fixers in the precious metal exchanges.

 

[president]

Q Anon told me it's just a matter of time before they arrest all the price fixers in the precious metal exchanges.

Well if there's one thing that's for certain, it's that the PMs will outlast the price fixers and not the other way around and most investors anticipate holding for generations to come.

 

[TheosisSeeker]

I like gold and silver and I do the physical PM thing, but it's a small part of my financial plan. PMs don't produce anything and if you were to have held them vs. an index fund the past 15 years, you'd be behind. Most stuff on the internet is fear porn, from people who are slinging gold and silver and if you call a collapse every few months for 25 years like those guys you're bound to be right a few times.

Plus if you're going to trade commodities this year was great for oil and energy stocks which are cyclical and exploded higher cause of the Russian oil embargo.

I am not close to retirement and like moderate risk though.

 

[COtrailrider]

For the majority of people, just get to 5% of NW and call it good. From that point DCA if one wants - $200 a month or something depending on risk profile. It's a method of diversification but it's likely not 'going to the moon'.

 

[Australia Sucks]

Your statement on copper and it's anti-bacterial properties has merit. It's possible that in the future copper could replace silver as an anti-bacterial metal. But for electronics and other industrial applications, silver will not be replaced. Silver will be needed for electronics, solar panels, and electric cars. You could substitute silver for gold, platinum, or palladium but those metals are much more expensive.



I don't believe that the price can be manipulated long-term. It comes down to basic arithmetic. Around one billion ounces of silver are used in industry each year, and around 850 ounces are mined each year. The price has to rise. So it's not a matter of if, but when.

Zoom in terms of Silver being used for electronics, solar, etc. The first thing to note is that if you look back to the episode when the Hunt brothers tried to corner the Silver market and silver went to $50 per ounce (in U.S. dollars) that a lot of manufacturers redesigned and retooled their products and manufacturing processes to use less silver. Could this happen again if for example silver goes to $100 per ounce? I do not know enough to say. Maybe the efficiency gains have already been squeezed out and maybe they have not.

Secondly Copper is only slightly less conductive than Silver but its a hell of a lot cheaper. Copper is already used heavily in electronics. Silver is much more corrosion resistant than Copper. Now the question is if the Silver price goes high enough will manufacturers consider substituting Silver for Copper and create new methods to deal with the aspects of Corrosion and conductivity? I do not know the answer to that.

Now in regards to your point about Supply and Demand imbalances below I have pasted this table from

SILVER SUPPLY & DEMAND - The Silver Institute

The Silver Institute provides leading research on silver supply and demand, including current and yearly data on silver demand, pricing, and production.

www.silverinstitute.org

You can see from the table below that demand slightly outstrips supply currently but not by much and in many previous years the opposite occurred where the market was oversupplied. Your argument seems to ignore recycled Silver which is wrong because Silver can be recycled many, many times.

• SILVER SUPPLY & DEMAND

The Silver Institute works with the Metals Focus team, a leading research
company that is based in London, to prepare and publish a comprehensive report on the
previous year’s silver supply and demand trends, with special emphasis on key markets and
regions. This annual survey also includes current information on prices and leasing rates, mine
production, silver trade, above ground stocks, and investment.

Material and statistics in this section were adapted in part from the Silver Institute’s World Silver Survey 2022.

 

[mountainaire]

My instinct tells me that you'll never get rich off silver, unless you're a dealer charging people fat premiums on 1oz coins. I could be wrong, but the following reasons make me doubt the whole "silver squeeze" thing:

1.) Silver is a byproduct of many mining industries and operations, and I've heard that gold mines literally just throw it on the ground and don't even bother processing silver ore because it's not worth it to them. If the price suddenly skyrockets, then all of these mining operations will start utilizing all of the silver ore and supply will increase, causing prices to fall back to normal.

2.) I believe that industrial use for silver is around 50%. Meaning half of all silver gets used in industry and the other half gets split between making jewelry and bullion/coins. Increasing consumer demand in the bullion sector won't be enough to disrupt the total silver market, which will be able to easily adjust to the marginal increase.

3.) Green energy is a scam, and that's what they're selling people on when they talk about a huge increase in future industrial demand.

Again, I could be wrong. But I've paid close attention to these wild silver predictions, and nothing has happened, with the exception of dealers charging more on premiums and probably getting rich from it.

 

[president]

I could see silver dipping below $15 and gold below $1500 before the Fed pivots, but I wouldn't wait on those prices before buying any.

Good points on industrial uses and whatnot but do you not think increased investor demand due to lost faith in fiat will drive PMs at all in the coming years? You think there's not just manipulation but total outright market price control? I'm not convinced they're that powerful or will remain so.

It's also shocking how many people still try to capture significant appreciation with PMs. Too much crypto fever going around still I guess. That's like complaining that your classic car doesn't have autopilot.

What's concerning is how some folks are fully subscribed to the Great Reset happening in the next eight years yet still somehow plan on freely chasing yields in various markets for the next 35 years until retirement.

I guess CBDC will allow Meta stock and Doge coin investments right?

 

[Ember]

My instinct tells me that you'll never get rich off silver, unless you're a dealer charging people fat premiums on 1oz coins.

I have bought some silver sovereigns to act as currency if fiat money collapses. Not to get rich.