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 [Music] [Music] I'm Charlotte McLoud with investing news.com and here today with me is Peter Kraut editor of silver stock investor and silver advisor now thank you so much for being here always a pleasure Charlotte thanks for having me yeah really good to be catching up with you in person here at BR I and as I was mentioning in the intro I think we'll start there you've got a new newsletter silver advisor so it's free can you can you tell me briefly about your plans there so uh what I did was just a couple

of weeks back I launched this newsletter there's an appetite obviously for uh research and information on the silver uh on the silver space and uh so I launched the letter and the idea is what we do is we follow um news releases by companies that are that are under coverage uh real time almost real time so our aim is the same day we will review a press release a material uh piece of news um comment on it talk about it within context of what the company is doing and how it's progressing and then um talk about the

Outlook and uh these are companies that I own personally so uh it's things that I have a vested interest in and want to keep tabs on and I decide that I'm willing to share that information with uh with subscribers oh that's great that's quite an undertaking so we'll we'll put the link to that in the video description if people would like to find it so we've got lots to cover today and we definitely want to look forward to 2025 but before we go there let's take just a a quick look back at 2024 did

silver perform as you expected it did actually so um you know I think some important uh points in time in 2024 di mention are that silver really bottomed I think it was late February around $22 and then it's started to run um by may I think it was high 20s or $30 went kind of sideways for a couple of months and then by October had run to $35 and that was the peak in 2024 so from 22 to $35 I think it's roughly about a 40% gain that was quite nice it dialed back we're still around the $ 30

$31 level it's still quite impressive um companies are able to feel more comfortable and and make reasonable profits at at those levels not gang Buster profits but uh but they're a little more comfortable I think that um it had kind of gotten a little bit ahead of itself at that $35 Peak I think that given the setup right now we have decent odds of returning probably possibly somewhere to that $35 level before the middle of the Year and that before we reach the end of this year that we could

probably touch potentially $40 in silver okay okay I'm going to remember that and come back to you later this year for sure so that gives us a look back at last year a little bit looking forward to 2025 I want to take a look at supply and demand starting with demand so I remember for 2024 you were looking at solar as a really important demand driver for silver what did that end up looking like last year if we know yet and and projections for 2025 so we don't know uh yet quite the full uh 24 year

numbers but uh what's interesting is that solar has continued to grow it is the single biggest industrial use for silver it consumes about 20% of the annual silver Supply which is mindboggling if you think about that whereas five a little more than 5 years ago it was just 10% of the of the silver Supply so solar remains important on the one hand I think that the growth will continue but it may slow so it won't be at the same pace of growth in in terms of solar demand and yet that's balanced by some

things where if you look back at um from 2010 onward uh if you look at 5-year projections for uh solar installations they were underestimated on average by three times so that meant solar installations on a five-year basis in terms of forast from 2010 onward were actually three times what uh the experts or or analyst had expected so that really tells you how a lot of people were caught offu in terms of how much solar was going to be installed and and of course the demand of silver for solar where it's

indispensable um and then you've got um I think that's going going to continue as I say so although the growth may slow the the strength will stay stay there to some extent then you've got uh demand from things like AI for uh for more power and you've got the demand from data centers which are on top of AI and um and then you've got uh Samsung which has a uh a uh a new solid state battery now we don't have specific numbers I've seen projections that are all over the map I

think it's from you know 100 grams to as much as a kilo of silver per vehicle uh but if this uh if it does pan out and it looks very promising if this solid state battery is adopted and it looks like it'll be mostly because it's an expensive uh technology which makes sense it's early uh more in higher-end vehicles to start with uh but it could really be a GameChanger because uh the range of a vehicle with solid state batteries is up to like 800 uh kilomet versus uh maybe 400 kilm so it's doubling the range and

that will really remove I think range anxiety from EV owners a which is a big uh which is a big deal and also the recharge is 9 minutes so that's fantastic that's almost like going to a gas station and filling up um so that really makes it uh a lot more lifestyle friendly to what we're used to with uh regular uh intern internal combustion engine Vehicles so that's interesting and as I say we don't know how much silver will consume necessarily but the the projections are pretty high and that

could really also feed into a lot more demand of silver okay yeah that's really interesting that would definitely clear up a lot of those those electric vehicle problems so the other point I wanted to bring up is there's a lot of questions right now about the economic Outlook in the US in China and in elsewhere globally really so to what degree could that that possibly create headwinds for for silver I agree uh so we've seen if you look historically silver has underperformed gold at through

recessions longterm in Bull markets it outperforms schoal but through recessions clearly it has underperformed is this time different hard to say but if you look at some of the drivers I think there is that potential that it will be somewhat different and I think solar is a big reason for that um so let's break it down a little bit if or when I think it's a question of when we hit recession I think that's you know we may be in one um it may only be declared officially at some point a little bit later I think

before we reach the middle of this year that's likely to be the case nonetheless recession uh is likely to get Market participants to say well silver is at least 50% and Industrial Metal maybe I don't want to own so much silver and could that weigh on it well I think as I say that solar aspect of it is such a big driver a lot of that is baked in a lot of that is um government driven in the sense that there is there are subsidies for solar installations in many places around the world solar is

the cheapest new form of electricity and so that's why we're seeing it adopted so so much so widespread um and so as I say for these reasons I think that that could counterbalance a little bit of the potential pressure on on silver selling because of its indispensable uh applications and then coming out of it uh so here's an interesting point is that because industrial demand has grown so much over the last 5 years or so we've gone from maybe 50% to now 60% of silver Demand Being industrial that

leaves less silver every year for the investment side so when we know that the investment es and flows and when it comes back to Silver it can come back as we all know it's very volatile in a very very strong way we've seen Silver squeezes before we saw the action in silver last year I think last year was driven by the market starting to realize that these annual deficits in the range of 15 to 20% um are going to really start to weigh on the supply of silver and because of that they started to realize

that you know the supply of silver is very tight we're consuming up to 20% more than we're producing from Mining and recycling every year the inventories are being drawn down that's what kept the price from really going gang busters and but it did run from 22 to 35 that was very strong these kinds of drivers I think are going to remain the silver Supply is very tight right now um and there's talk from the US of potential tariffs on all sorts of things on Imports um there is some interesting

research from TD very recently that said that the tariffs are from what they see actually driving a lot of movement of silver from London right now into the us because that's imported silver um as we're speaking I think uh is the Trump inauguration uh the uh those tariffs are you know a wild card they could happen at any time if they do happen that's why the the the Traders were trying to front run it and get the silver into the US they the the premiums on physical silver versus Futures silver price have

exploded because of that and they want to get their hands on that silver to avoid the terror cuz that could really potentially sync in fact some some uh some big players so all of these are are in play that that is not something that uh that has fully played itself out in terms of the risk with the terrorists so uh the premium on physical is important and so as we look out uh I think that the market will remain tight and that bodess well for for higher silver yeah yeah we're in a tricky place right now

with the timing of this conference with with the inauguration literally I think as you said right now so we'll we'll have you back to take maybe a closer look at that once it plays out but I want to talk a little bit more about the supply situation for silver and the deficit so I think 2024 we were headed toward our our fourth year of a pretty big deficit and I know that when people look at the market and the price that's part of what is frustrating is to see this and there to see the price and you

would explained when we spoke last year this is because of the secondary Supply sources that this has been allowed to happen so how how are those secondary sources of Supply looking right now they're not looking good they've been drained and this started in early 2021 if you look at uh you look at the inventories from lbma from New York the comx and from the the Shanghai uh Futures exchange their inventories have been drained pretty dramatically to the tune of at least 40 to in some cases

70% uh just recently again I was looking at the numbers lbma which is the bigger player in this sector um had a big draw down again in December something like 23 million ounces came out of uh the lbma and so they're near uh their lows of the last decade in terms of supplies so it's very interesting because in London for example there's about a total of 825 million ounces of silver in inventory about uh 500 they they're a big player when it comes to Silver ETFs that's where a lot of the

silver for for ETFs is stored and so about 525 million ounces so 60% or so of their silver is already spoken for for silver ETFs that leaves about 300 million ounces of the 300 million ounces about 250 million ounces every day are required for for trading to settle trades and so on so the buffer is only 50 million ounces that's historically low and so if there's a big demand for deliveries that continues that could really start to squeeze that even more and so it's it is becoming kind of uh

precarious that way yeah and I think just so you're talking about the the precariousness of Supply how is mind Supply shaping up in 2025 because we do we do have higher prices maybe not as high as some people would love to have got a higher gold price as well does this unlock lower grade material or is there any movement there that we see you know that's interesting point because uh not always but I think given the last cycle a lot of these producers have become become gunshy31 again um into projects that are already

profitable and even more so in projects that are becoming more sort of marginally profitable so they need to see these higher prices sustained for quite a while before that's really going to start to make a difference I saw some research I think it was a Bank of America that looked at um Mine Supply from primary Silver Mines and that actually peaked in 2016 so although uh demand has continued to grow significantly and we're in deficits M Supply has actually not only been flat but it has actually Fallen since 2016

and we're talking about a 1% up 1% down over the next few years they think that out to at least the next couple of years we're going to see uh Mine Supply completely flat so we're not recycling might contribute to some extent but it's only about 15% of the supply Market really the only thing that there is to look at is we talked about the secondary supplies and perhaps um difficult to quantify privately held hordes of silver now my argument about that is that yes uh that can certainly come to

Market that can help ease Supply constraints but you have to ask yourself at what price level so a lot of these are stackers a lot of these are people who've bought the silver as a chaos or inflation hedge of of of different kinds and so um I think they're going to need to see silver at considerably higher prices than they think that's will will help in part at least Drive Silver higher yeah I think that makes a lot of sense was people with so much it would take a lot to have them let go so I

think of course we have to ask so silver potentially $40 silver in 2025 sounds like it's a good plan to own the metal itself but in terms of the the silver stocks is there anything you could say about how how you're playing this Market this year yeah so last year there were a couple of really big deals um I had talked about the potential or the likeliness of that going back over a year saying that we're going to start to see a lot of m&a happen and that panned out this fall this past fall we had first Majestic

acquired GTO silver that's one of the bigger deals and then we had um ker mining acquire Silver Crest also quite a big deal um an already small Market is is shrinking and getting even smaller in that sense and like I say they've been [Music] gunshy31 makes sense to go that route but because there are so few players in the space I do see that gradually moving down the food chain and I think that we're going to have to start looking at perhaps things like more mid-tier producers where they would do things

like either acquire each other or start to combine and then the next level below that will be some of the developers that you might either see the bigger producers acquire or U perhaps be acquired by a more aggressive of mid-tier that kind of thing so I think that's going to be the next level the Juniors will have their day um there's always some exciting developments we know that the drill bit and big discoveries get rewarded we've seen that multiple times we've seen it recently

we'll see it again uh but I think that sort of the middle of the range in terms of market caps is where and and advancement is where we're going to see the more activity coming okay that makes a lot of sense so we've we've gone through I think quite a bit in a short amount of time for silver and as I said hopefully we have you back to take a look at maybe the the Trump impact here but any final thoughts for now that you would leave inv Bastard with in in 2025 sure so one interesting point I went

back and looked at some of these numbers recently and it was um the silver institute's uh forecasts when uh they come out with their world silver survey that's in April every year and then they do an update in November and what I what I noticed was that uh they had actually uh expected that investment demand would be down uh which it probably is at least anecdotally what I'm hearing that makes sense so that the deficit would be initially they thought it'd be about 215 million ounces they revise it to about

180 or so million ounces but there's another line item and that is investment into silver ETFs globally so in their April report they had expected it would be about 50 million ounces would flow into which is sort of medium not especially strong a little bit weak but in the revision in November they doubl that to to 100 million ounces so if you include uh the deficit uh by including the line item of uh flows of silver into ETFs we're actually going to be for 2024 at the second largest deficit we've ever had

the 2020 was 300 million ounces uh 2024 with that in mind if they're close to the final numbers is going to be about 282 million ounces so very robust looking very tight and I think again bodess very well for the outlook for silver yeah well thank you for those calculations that's very interesting and and thank you for stopping by to talk about silver really good to have you always a pleasure Charlotte thanks very much of course and once again I'm Charlotte McLoud with investing.com and

this is Peter CR thank you for watching if you like this video make sure you hit the like button and subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below [Music]