David Morgan Joins Us To Chat Silver and Silver Stocks
David Morgan, Founder of The Morgan Report website joins us for an extended discussion focus on silver and silver stocks.
We start by recapping silver performance against a wide range of commodities and other precious metals. There’s no denying silver has under performed over the last decade so we look to why this has happened. We then shift the different environment for silver stocks. Many have shifted to focus on a range of metals over the past bear market.
if you would like David to address any other questions on silver or other resource sectors please comment or email us at Fleck@kereport.com and Shad@kereport.com.
If I didn’t already have plenty of IPT, I’d buy more right now. That’s my biased opinion only, not advice.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=5&dy=0&id=p19882188757&a=954931450
I would be very surprised if IPT is able to break above .73 this year. That’s obviously a decent move from current levels, but it’s not life changing.
Like a bunch of other silver miners, it faces stiff resistance owing to last year’s chart damage. I think we will have to wait until spring or summer of 2023 before miners like IPT start their moonshot moves. I could certainly be wrong about the timing, but I think I am just being conservative. If a break above ’73 does happen this year, July/August will be the window where that will be possible. Of course anything can happen, and if you can wait, now is a good time to buy.
I will be surprised if IPT doesn’t go way beyond .73 this year.
If silver does need much more time than I currently realize, it would probably be due to the lack of chart damage since it was unable to retrace its entire vertical move of 2020 and in fact was unable to even reach its 2016 top for a retest. That’s impressive strength that I pointed out here months ago. If a market can’t shake you out with a scary plunge, it will attempt to wear you out by chopping sideways for an extended period.
It’s worth noting that silver had much more significant chart damage in 2020 yet still went up 2.5 times in the 4.5 months after it bottomed. It is further worth noting that the “big” quarterly chart looks just fine and is conducive to the immediate resumption of the move up that began 2 years ago.
Silver will be all set if it can close next week or the week after well above 26.50 or so.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=6&mn=3&dy=22&id=p37097659142&a=426943004
On the quarterly chart, we will have a massive breakout with a quarterly close well above just 25…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=Q&yr=50&mn=11&dy=0&id=p55924572136&a=1139425735&r=1649437283991&cmd=print
I think the silver juniors’ massive underperformance of everything is a strong indicator that they and silver are going to be rangebound for the rest of the year. Even if silver manages to get past $26 in the near term, I think it will come right back down to current levels 6-8 months out. In other words, no breakout past $30 this year. I think that breakout will come in the first half of 2023.
IPT will likely retest the 2016 high in the spring or summer of 2023. After that I expect it to go up 5-10x in the following 2 years. There won’t ever be a trending bull market per se for any of these juniors–just a long consolidation since the 2016 low followed by a vertical explosion higher between 2023 and 2026. Absolutely nothing like the bull we saw between 2000-2011.
In the near term, it is the gold miners that look like they are about to spike to new highs. But even with them, I think they are going to come back down and retest their current level 6-8 months from now.
Silver always lags gold. If the lag is greater this time, I’d say it’s because silver topped 6 months after gold (August 2020 vs February 2021). Adding to the “problem” is the fact that silver blew gold (real money) away in 2020. Gold rose a large 44% in 21 weeks following the covid crash but silver rose a massive 157% in 20 weeks on its way to a higher high 6 months later.
I don’t think you understand the sector and its drivers very well if you think the 2000-2011 bull won’t be easily blown away during this decade. And maybe I am missing your point. I do agree that it won’t be the same in character but the gains will be much greater.
In real terms, the 2000-2011 bull was actually one of the worst (yet many are oblivious to that fact including James Flanagan of Gann Global Financial).
We are in the very early stages of a bull market in the miners vs gold that will dwarf the gains of any bull since the 1970s. The XAU would have to rise close to 5 times vs gold from here just to reach its mid 1990s high.
https://stockcharts.com/h-sc/ui?s=%24XAU%3A%24GOLD&p=M&st=1983-11-01&id=p03073957520&a=443583743&r=1649443245211&cmd=print
You misunderstood what I said. This “bull” is basically going to be over in the span of 2 years once it is is made clear to the masses (i.e., the silver juniors FINALLY break above their 2016 highs). However, that 2 year window should see silver shoot to $150+ and the juniors go up massively. Whether its 5x or 20x I have no clue, but the 2011-12 highs should be exceeded easily and I am expecting many of them to double or more from those highs.
My point above was that this is not going to be some smoothly trending bull like the one between 2000-2012. No, it will all be *massively* back end loaded to the point where things like moving averages and other technical indicators will be of little to no use in timing entries or exits.
I’ve seen similar patterns play out in other commodities–long basing, i.e., 5+ years off of the lows–followed by explosions higher in relatively short periods. That is what I am expecting with the silver juniors and silver in particular. If I am wrong, and it all comes earlier, then so be it. I already am fully positioned.
Thanks for clarifying. Your view is much more credible than I understood. Still, I have to disagree if you’re talking about the end of the secular bull market in that 2 year window. Yes, there will be a major cyclical top that could last a few years but then the secular bull will continue on, especially in the miners since the real price of gold will remain historically high while other sectors will continue to have problems.
I am not going to mess around. Once we are clear of the 2011 highs in the juniors, I am going to be scaling out rapidly.
Who knows what the future will bring. The first mine that is nationalized by a first world country will send the mining stocks crashing in all likelihood. Additionally, I would like to diversify into other hard assets or even buy more bullion instead of sitting on mining stocks that (I am hoping) will have gone up 10-20x in a very very short period of time.
Any projections about future price action after a spike like I am envisioning is nothing but pure gambling. Basically, I am expecting silver and silver juniors to do what wheat did between 2000 and 2007. Currently, I think silver juniors are where wheat was at the start of 2005. I think they will not stray that far from the 200 dma for the rest of this year, just like wheat did in 2005.
14 years later and wheat still hasn’t recovered its 2008 high.
Of course I agree with selling the move. The 2020 move should have been sold as well. The resource space is the worst for the “buy and hold” approach.
Even platinum needs to rise 139% just to reach its 2008 high because it lacks important monetary attributes.
Check out the Russian Ruble!
The exchange rate today soared to 76:1 against the USD, implying a price for gold of $2,055.
Something is gonna break shortly?
It’s fascinating to me that the Ruble has OUT-PERFORMED the U.S. dollar since the invasion!
The RUB was the best performing currency for March. The Russians are trying to put a floor under the Ruble and gold. The West wants both weak, to which Russia says, “Nyet!”
Here’s a handy dandy RUB/Gold conversion chart.
If this ratio keep climbing–meaning that the implied value of gold climbs to $2,100 or $2,200, then look for the USG to move beyond financial warfare to kinetic warfare in a hurry.
oop’s, sorry chart would not print here. But, RUB/USD 70 = $2,221 gold