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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Peter crout editor of silver stock investor and author of The Great silver bowl thank you so much for being here great to have you well Charlotte as always it's a pleasure pleasure is mine and I'm looking forward to talking all things silver I am also looking forward to it this is my first silver focused interview since we saw silver get through $30 and I'm excited to hear what you have to say I think it's pretty

interesting because our last conversation was not actually too long ago it was about three months ago at pdac and one of our main focuses in that conversation was about why the silver price wasn't moving and I think now it's safe to say we're moving at least a little bit we've got through that crucial level so I'm curious to get your take what was it that set silver off finally to get past that point well I mean it's it's always hard to really know uh with any certainty what will

make the price of something move unless there is some really really clear obvious thing um you know if you're talking about uh uranium for example if there's some sort of event geopolitically that that it involves that um that uh commodity those kinds of things are easier to pinpoint there hasn't been anything specific with silver I think that uh we could pinpoint what I will say is I think that silver has been following gold Gold's a break up you know EV first 21 2200 level and

now recently reaching 2400 I think is really sort of LD of fire under silver and um kind of typical action it's followed with a bit of a with a bit of a lag uh we've seen that that happens on sometimes on the short term it happens on sort of a longer term basis if you look at entire bull market action um so I think that's been a lot of what's been driving it and I think people are also starting to realize you know we we've we've gotten um feedback from the the silver Institute just about a month ago

a little over a month ago their annual survey they're forecasting a a structural deficit this is going to be the fourth year in a row um and if you add up the deficits of this year year and the previous three years are somewhere I think above 600 million ounces which is about 60% of an entire year's supply um and then there's all sorts of things we can get into that are driving um silver lately um I I do want to maybe go back to something that we talked about I think in fact it was in your in

in my interview with you back at pdac uh when I talked the very very first time about what I thought was potentially capping the silver price and that was you know I had this this Instinct I guess you could say that uh and from researching this enough that something had to be uh there had to be a source of supply for in especially larger industrial users that it was allowing them to to tap silver without having to force production right so Force Min Mining and or recycling so I I looked at the different um me major

Futures exchanges and the and the ETFs globally all of which store silver have sec what I call secondary silver inventories and what I was telling you at the time was that they' all been drained by about 40% overall over the last say three years at least or so and um and then I've started to hear more more talk about that kind of thing since then and um so if you look at what's happened with the ETFs that has continued if you look at what has happened with the different um the different large Futures exchanges for

silver the same thing has happened and I think that the markets come to grips with the fact that um that's where the silver is coming from that is what has allowed in these large consumers of silver to tap silver supplies without uh pushing the silver price up and that we're potentially somewhere around 12 to 14 months of sorry 12 to 24 months of this continuing before we're going to run out of these uh secondary supplies and um and then you know all bets are off someone's going to try to get silver

won't be able to and um I as I say I think the markets come to grips with that realizing what's going on that combined with considerably higher gold price is helping to really really move slower these days yeah you know I had it in mind to ask you about that because you did explain that situation very well during that previous PDC conversation and so it's not that those secondary inventories have now been mopped up it's just there's that growing realization that this is happening exactly so to a certain extent

they have been drained I'm going to say you know if you look at them overall about 40% or so um uh overall uh uh drop in terms of inventories we see that with the three major exchanges uh the Shanghai lbme the comx and then if you look at ET s globally and even if you look specifically let's say at SLV as a great indicator SLV being the world's largest silver ETF the first silver ETF created has about 11 and a half billion uh dollar market cap and it's silver oun hell are down I think it's something

like 40% since uh it peaked in 2021 uh that's right around the um by the way that was that's right around when we had the silver squeeze and uh and so and uh you know people went and bought it uh in huge amounts I think that within a matter of a month or a couple of months they increased silver Holdings by about 110 million ounces it was just phenomenal um so uh it's reversed ever since then and so we've seen as I say I believe that there's draining of that by larger uh consumers and it also is a

reflection I think of apathy uh towards silver and I'm going to say even despite this tremendous sort of blistering runup we've had in the last well overall in the last say almost three months but especially in the last couple of weeks when it broke through $30 and then ran to about 3 32 about 3250 or so I think that um um despite all of that we still have um apathy towards investing in so over the the price may have run up and I think that you know it it um in in a relatively tight Market it doesn't take

a lot of buying um so we've seen that price R an up but Silver's nowhere near uh done with its run because uh we we have these indicators from as I say the the ETFs SLB in particular it's not only the um the number of ounces held but it's also the number of shares outstanding of this the SLV ET TF that has continued to fall even through this um period And so as I say there's apathy towards silver which means it has a long way to go it's usually when everyone's piling in like we saw as I said before

during the um the silver squeeze in in late January 2021 the share count of SLV absolutely exploded silver Holdings absolutely exploded that was a big big uh indicator that it was going to be a top off um and it was going to Peak and then start to to drop off well silver has remained in a Range since then and the shares outstanding the silver ounces held have have continued to fall but because of those two things as I say there's there's a clear lack of Interest almost apathy you could even call it

disdain um silver AG go in this kind of environment okay and and interesting you talk about the apathy towards silver I'm wondering do you think there's an element there so this this $30 level we haven't seen that since 2011 I believe um do you think there's an element there or sorry for 11 years do you think there's an element there of people who got in around this level and now they're saying okay it's it's time for me to leave I'm done with this absolutely

absolutely you have you always have people buying at uh at high levels they they follow the crowd um they they buy as I say at high levels and then they they're disappointed because they don't have a contrarian streak they don't buy something when it's cheap and and difficult to buy um so they buy at high prices and then they sit on it and and they're disappointed because it continues to correct and um if they hadn't haven't sold and they start to see it at these prices then they say oh

I can finally get out get my money back and uh Silver's not going anywhere hasn't gone anywhere for 11 years it's only gone down so now I'm going to get my money back and uh and they're out so those are the weak hands and the strong hands are the ones buying it and you know you have to kind of look also I think globally regionally on on a global basis and see what's happening and uh the weak hands are in the west and the strong hands are in the East and if you look at places like uh turkey you look

at places like Egypt where they're facing severe inflation um prices of silver H have skyrocketed people are turning to Silver instead of gold because gold has become too expensive for him um and then you look at things like in the past um I'm going to say two months in particular especially since well actually since since silver and gold bottomed in in at the end of February and has started to really run up um Shanghai um silver prices are now at uh about $4 premium over what we have um on the lbma so able in China are

willing to pay a lot more for silver than than we are um and uh it you know there's all kinds of reasons with that I guess you know economically politically geopolitically Etc but uh they're the buyers and so pricing I believe is also moving East and so you have uh I believe because of volumes and so on East is really going to become more and more of uh the the determinant in terms of true pricing for uh for especially for precious metals so that is definitely something to watch as well very interesting and you know

you're mentioning earlier the gold price and of course gold moves before silver and we've seen gold at record highs in 2024 and when that was first happening I think I had countless conversations about whether this was the real deal for gold and I think now people are starting to of course ask that about silver so I'm curious so this $30 level are we now at the point where that starts to become the floor for silver instead of resistance as it has been I absolutely believe that it will become a new floor

um it's it's uh it tested the $30 level three times it first time was in um I believe it was August of 2020 after the covid pandemic and silver had actually run 140% higher after it bottomed in March of 2020 around $12 it ran to to $30 it's 140% gain just tremendous um tremendous return uh it tested that at the silver squeeze point which was uh January of 2021 and then just recently again a couple of weeks ago we had that push to 30 and then test that level and finally push through so that triple top

did not hold we broke through I think we could see over the next I think sort of near terish when I say that I mean weeks perhaps months the longer term I always feel is a lot easier to predict and that's because it's not it's not as specific um it's not an it's not a Copo but it's just a matter of fact I guess that it tends to be easier but uh I think we could see uh a little bit more uh weakness potentially in the next weeks perhaps month or two even as we go through the s I'm not

saying this will happen I'm saying it could happen um maybe we'll see a test of 28 maybe even sort of a wash out test at even as low as 26 but I don't see much weaker than that I do see um ultimately $30 being uh passed if we do get a drop below ultimately we will regain 30 and that will become a new floor and I think you know one once we've hit uh if we've gone below and we've gone back above 30 and we become and silver stays comfortably above 30 that will become a new floor and we'll probably not revisit

anything below 30 after that okay and I think this starts to answer another question that I had in mind to ask you which was is now a good time to buy silver and you know you mentioned the long term as well and I think people who are familiar with you know that you've spoken about how we can in the long term get to that triple digigit silver price so any any thoughts on is now a good time to be buying that you would add further I mean I would say absolutely yes if you don't own any if you don't

feel you own enough at the very least start to nibble so decide what you want to allocate um I don't know nobody knows if it's going back below 30 maybe it will tomorrow maybe it will next week maybe it never will so perhaps the best way is as I say decide how much you're prepared to allocate and maybe do it in trashes say if that's five or $110,000 tell yourself I'm going to divide that into three and I'm just using an example I'm not giving advice um this is perhaps

what I would do I would say I'm taking this amount I'm willing to split it into two or three trashes and I and I will uh be very tactical about it I'm willing to buy a third now I'm going to watch what happens over the next couple of weeks if I see the below goes to 28 perhaps I'll buy a second TR if I see it dip further to say 26 perhaps I'll buy my last TR if it goes to 28 and starts to steadily climb back maybe I won't wait but I'll buy my my uh final sh back at around 30

but I would I would layer in is is really what I would do and I think that even if you're buying now for the first time we're adding at at current prices but you're doing it as I say tactically and putting in a portion of of an amount that you are prepared to commit uh then you should probably be okay it's you know um a standard practice called dollar cost average and so um I think that's a way to sort of mitigate some risk okay and I'll come back to the silver Equity side of things a little

bit later for now I have a couple more things I want to ask you about the silver market in general so I think you've done a great job of explaining how silver got to this point that we're as now but I'm curious to know moving forward you know Silver's got its precious side it's got its industrial side what are the main drivers that you'll be watching say say in 2024 so you know one of the big things that I think we have to watch is uh is what what is happening on the solar side

now we've certainly talked about this before uh it's talk about it in in all interviews uh you've got to watch what's happening with with uh with solar you know if you look at the numbers for example the the U silver Institute put out its World silver survey um about um about uh month and a half ago and uh they basically indicated that solar grew the sorry the demand for silver for the solar industry grew by 64% from 2022 to 2023 which is just absolutely phenomenal growth and um we

haven't even accounted for the fact that there's this transfer or this transition towards um higher consumption of silver by uh because of Technology changes in the solar panel industry so we're going from uh I guess what has been the the the standard which is H something called perk in terms of technology for solar panels we're moving to something called topcon which requires up to 50% more silver per panel and then eventually we will potentially transition to another technology called hjt which requires up

to 150% more silver so the the you know we've seen thrifting in the industry uh the producers of solar panels have been naturally squeezing out the amount of silver they want to cut cost as long as they keep the output to the energy output the scene and they've gradually managed to do that over the last 10 years it's kind of Fallen fallen and then gone sideways and flatlined I think once we ultimately see perhaps numbers for this year maybe that's only later this year or early next year we're going

to see silver per panel overall uh manufactured per year start to climb back up and that's because of the switch in technology um you know China obviously is the dominant Force like in so many things um 80% of manufacturing Capac capity is in China but we need to watch carefully what's happening in India they are going to Triple their solar manufacturing capacity between 2024 and 2027 they've recently announced that they're going to build the world's largest energy Park renewable energy

Park in India in garat state it's going to be five times size of Paris um and you know Sylvia sorry um India is a very very sad um silver buyer investor they um have Imports in uh were their Imports of silver in February alone of this year was over 70 nearly 71 million ounces that was 64% of their entire 2023 Imports so maybe this renewable energy park has something to do with it they're going to need a lot of silver for that it goes beyond that as I say they're savvy investors and buyers they

buy when it's relatively cheap and they tend to sell when it's relatively expensive it's been cheap for quite some time they've been loading up in fact 2022 was an outsized year for uh Indian consumption silverware silver jewelry silver investment uh coins and bars that actually dropped back uh in 2023 and people are saying oh you know there's no more interest on the silver jewelry silver Weare silver investment side that's completely wrong because it's dropped back to levels that were

still above the year prior which was 2021 so 2022 was really an outsized year for these categories it dialed back in 2023 but as I say it dialed back to levels above 2021 so we're still seeing growth even if we completely eliminate what happened at 2022 it was really as I say truly outsized year and surl one last point the International Energy agency is forecasting that India is going to experience the largest energy demand growth of any country or region over the next 30 Years so you know China

has been a dominant factor in this space I think we really need to start to watch what's happening with India as well these days okay so we're keeping a close eye on solar and we're watching India now in addition to China and I think this is going to be maybe a fun question we'll see so in Copper I see all the time when they're talking about copper demand for electrification you'll see various ways of quantifying that such as you know we need X number of copper mines to feed

this demand from electrification has anyone done that kind of math on Silver just because I find it kind of helps me visualize what is coming um I haven't seen that actually that's that's a great point and very interesting uh I haven't seen uh anybody say okay we're going to need so many uh mines right and and silver is perhaps very difficult to do that with for a few reasons one is that as you know um only about 30% of mined silver comes from what are called primary Silver Mines the

other 70% comes as a byproduct of mining copper gold lead and zinc so 70% of silver that comes out of the ground every year depends on mining these other metals and um so primary Silver Mines are a rarity and we know that uh silver mining has been has flatlined despite growth of U 20 or demand of 20% above what Mining and recycling can can generate every year and if you look at there there were just some interesting very very interesting stats that came with um the silver institute's uh survey

back in in uh in April they uh indicated that cash costs were up 61% for silver miners primary silver miners um all-in costs were up 25% and so their profits their their uh profit margins were down by 30% in in 2023 and if you look at um reserves reserves have fallen they have not been able to replace uh the the entire amount that they took out of the ground in 2023 we also know that m&a is is has been low falling it's been it has it's at levels we haven't seen since 20 sorry 2006 so not surprising uh deficit

forecast for this year deficits forecast for years going ahead and um I put together this uh this uh sort of small chart or or slide that I look at or that I present when I do talks and I compare forecasts and I I call it you know silver 2023 realities for example and I look at forecasts and then ultimately revisions when you get the final numbers out so Supply was expected to be up initially by 2% it was revised down Supply dropped by 1% so that's a 3% sprit industrial demand was supposed to

be up 5% it actually grew by 14% solar demand was supposed to grow by 28% it actually grew by 64% the supply deficit was supposed to be 142 million ounces actually it came in at 184 million ounces so all these different sort of categories and and and aspects and characteristics of the silver um the silver industry uh and Supply demand uh side of things were under uh I guess you could call it under forecast um too conservatively forecast all of these things um clearly outpaced uh in terms of of making things

painting a bullish picture basically for for the sector so that's that's one of the reasons I mean if you not just on the sentiment side but if you look at the pure Supply demand side the fundamental side of the silver market it remains tremendously okay and I just want to go back for a moment to those costs for the silver producers that have increased so I'm wondering is that because of inflation is it because the price of silver is not high enough is it a mismanagement thing is this is this a

concern for you I guess is what I'm getting at so yes so yes to all of the above it's an inflation thing it it's a it's a it's a question of in some cases something they can't control which is currency exchange so the majority not not the majority but Mexico is clearly the largest producer of silver by far the next two largest producers are China and Peru and they produce less than half of what Mexico produces well the Mexican peso has gone against producers if they are converting

back to us or Canadian dollars over the last year so that's been that's made costs more expensive because they have to pay supplier lots of suppliers they have to pay salaries and pay those and so on so that that's hurt inflation of course has hurt they're paying more for fuel they're paying more for equipment they're paying more for services of all kinds as well so that is hurt um it's just uh you know a constant story across the board or grates are consistently falling as well so they're they're

facing that um you know uh there have been difficulties with uh there have been some mining Law changes in Mexico that have created headwind uh the bigger concerns are threats that haven't been um realized yet in terms of say potential ban a potential ban on open pit mining in Mexico that's something that the outgoing president um you know has been threatening there's an election I think it's like in a couple of weeks so we'll see what happens with that um I have actually I have some

relatively high hopes that that actually eventually ultimately goes away wait because uh there are all sorts of challenges in terms of the unconstitutionality of how they've tried to pass these laws and so on so apparently there's very very little for that uh to stand on and ultimately too the um the governors of the individual states are have a lot of power some states are very very big mining States they're going to have to uh face those governors um and if they try to you know pass some of these laws will affect uh

the the AB ility for them to create jobs and so on from mining so it's really not that straightforward problem is that that creates an overhang on some of the Mexican producers in some cases fairly in some cases unfairly so that is something that actually could create an opportunity I guess for investors as well okay I think it's good to go over that because you really start to see how you have to be choosy when it comes to the silver stocks and I think during our previous conversations you've mentioned

this sweet spot being developers and growing producers so I wanted to check in with that and see if that's still where you kind of aiming in terms of the silver equities yes it is um I think that uh especially if we look at what's happened since um the end of February you had uh and I can see it clearly because the way I have the portfolio for for my newsletter set up for silver stock investor I specifically categorize the companies by uh by size and by um I guess by level of um of maturity so the

the large producers uh are first then you have the smaller producers then you have developers and finally Junior explorers well when silver started to move along with gold at you know at the end of February bottom at the end of February it started to take off we start we I saw very clearly that it was the large producers that were moving first and then you s saw the developers were the ones who Moved second probably within about I'm going to say three to four weeks you start to see the developers rise of price and then

finally the junior explorers uh kicked in and that is I'm going to say mostly over the last three to four weeks or so and so you know uh I I tried to play with the fact that we saw things turn and decided that okay uh right around mid-march was a good time we saw the bottom just prior uh end of February two weeks prior I added one Junior Explorer uh a Mexican one um at the end of March sorry in the middle of March uh that's done really well it's up 45% since then I added another in the

middle of May that's up about 35% since then so you know we're talking about a matter of a month and a half half to two months and a half and so that just gives you some idea how quickly these kinds of names can move um and uh I still see right now the best opportunity remains with sort of the the developers the smaller producers and the junior explorers okay I think that's that's interesting to go over so even though we still have much further to go most likely in silver we've already kind of

seen those one two three categories all start to move so I'm interested I guess to hear how does that continue to potentially play out as as the market will Market continues so I I see um pretty much on a same basis I mean if you get a pullback um expect that the juniors are going to suffer a bit more uh right it's going to be it's going to be all sort of proportional right so expected Juniors to suffer a little bit more and that will create again more opportunity because once it starts to stabilize and

climb back up then you're going to have that larger leverage from those names I mean to give you some idea um from the bottom in late February I've got some names in the portfolio that are up I'm going to say especially some of the Juniors anywhere from about 60% to some have gone up as as much as 170% so it's just been an incredible run and uh every name is different uh obviously they all vary they all have their different circumstances but uh there's a lot of potential and and so to

go back to your original question expect similar kind a similar kind of Leverage in in the names in the different categories as we go forward and based on what ends up happening with the silver price okay okay very interesting and I I can't let you escape this interview I don't think without talking about the fed and it's really interesting I think that it's kind of coming toward the end of the conversation because for so long I was hearing from various people okay we've got to watch the fen when it

starts cutting rates that's when gold and silver will will really start to go and of course we've seen them start to move without that rate cut so I guess my question is how much how much attention do silver investors need to pay to the FED right now of course we can't just throw it out the window but what are your thoughts there so it's interesting because in my in my letter I I uh I did mention this goes back maybe about a month or even I I've done so a few times before and I I did expect in part

because they'd been so insistent that they would start cutting rates probably in at least the second half of the year uh I'm not so sure either right now because um inflation has stayed pretty high but are signs that it's starting to cool off I I think they really still do want and probably will cut um even if inflation stays a little bit High higher than they'd like I think they want to look neutral before the election so at the very least probably at least start to cut if if not do the full three cuts

that they want to do prior but what I've been saying to subscribers is that you know if you look at how gold and silver by extension perceive this rate cuts are positive because it um it uh starts to create this this uh this uh negative real rate or at least a trend towards the negative real rate environment again which is is positive um and yet if they don't cut um it's it's because they feel that inflation is high and they can't cut so it's almost like it's a win-win basically for

precious metals right it's it's like the the uh the FED has quote unquote given up if they if they don't cut as soon as they say um and so I think precious metals sniff that out in advance and they realize that um the FED is really truly stuck I also think that ultimately they will cut even if inflation stays High there'll be so much pressure on them if you look at uh budget deficits for example they are massive the US budget deficit is growing at a rate of about a trillion dollars every hundred days in

the US it's just unreal and so um they're going to be uh if they're not there already at a point where they have to print money just to pay the interest on their debt and that's the definition of a debt spiral so I mean the black swans are circling everywhere um you've got sovereign debt crises that are a risk you've got banking crises that are a risk you've got geopolitical tensions all over the place you've got inflation risk you recession risk stagflation risk

I mean um you know uh the skies will be black with black swans before you know it you can just pick one you know by definition obviously you can't uh you can't you can't predict them um but it's easy to come up with potential scenarios of of of What kinds of swans are out there okay okay what a what a very Vivid visual of the Skies dark with the black swans okay all right so one final point before we start wrapping up so I think those who know you and follow you will know that you've been working closely

with when Preston who is now moving on from newsletter writing so you're going to be teaming up now with Jeff Clark and I wondered if you wanted to share any information about that transition absolutely so um Len has been a newsletter writer with the maven letter for 10 years she started that I believe back in 2014 and um she has been a um a strong voice in the sector very well followed very well respected uh and and a true professional and I think that the fact that um she was uh uh nabbed or snapped

up by West Red Lake gold speaks volumes um I think that they're very lucky to have her and um I think that she's going to bring uh tremendous uh professionalism to uh to that job she will be in charge of investor relations and communication at West Red West Red Lake gold a company that in fact she had written about I think over a year ago so um you know she already liked that company before deciding that she would ultimately work for them so that speaks volumes about her and it speaks volumes

about the company as well um and so it will be as you mentioned Jeff Clark who is going to take over uh the maven letter at that will blend in with his uh recently launched paid newsletter called pedri prospector and in this transition process I have decided to partner with Jeff um now that Gwen has exited the newsletter business so for for me for my subscribers everything stays almost exactly the same there's it's going to be a very very smooth transition so I'm I'm really happy to

work with Jeff uh guy I've known for several years very professional very long um history in the mining business as a an analyst his dad was actually a prospector uh with with claims in Arizona I believe Nevada and California so his history with mining goes way back um but a true professional and and uh more importantly uh or not maybe not more importantly but but ultimately thank thankfully also a really really really nice guy um and pleasant guy to deal with and so I feel very grateful for

that okay very good thank you for the update and of course all the best to Gwen and to you and Jeff as you're continuing on so I we'll wrap it up there but I will put it back to you and just just if there's anything final that you would want to leave silver investors with because we know that it can be a volatile space well that actually is so you stole my thunder Charlotte and it's that's okay it's it's uh it is volatile and and that is something that if you go into it knowing that and and considering

it then that helps to make it easier to deal with but the volatility is at the same time your opportunity because um you can watch for these either big draw Downs or these run-ups and take advantage of than that and you and you should so if you as I said earlier if you don't feel that you've allocated enough to the space go ahead start to buy in uh in Tres that's probably the best way at this point uh but don't don't expect $20 silver I don't think that's going to happen um I I as I say

my downside sort of uh worst case Target is potentially at 26 I wouldn't necessarily wait for that uh much more realistic I think is probably somewhere around 28 uh but we could even stay above 30 and not not see a dip below 30 um we're in New Territory you know I think it's clear that if uh just of a few months back we were we were at 22 and we were recently at 32 that's a tremendous gain in in a short time I think it's on the order of about 45% the definition of a bull market is a 20%

gain so we've more than doubled that so by official uh you know technical definitions we're clearly in a new bull market so um take advantage of it participate silver is very very cheap um you know we still have the gold silver ratio some around 75 it's averaged about 55 or 60 over the last few decades so on that basis just if gold were to stay put silver has a lot higher to go and typically when you get uh the ratio running down um both Metals do well but silver continues to do even better and

it tends to overcorrect meaning the ratio goes even below its average meaning silver goes even higher so uh look for this to be potentially a really tremendous run over the next months and years okay I think that that's a great place to wrap it up thank you so much for coming on to explain what's going on in silver this was really helpful it's my pleasure as always Charlotte thanks so much of course and once again I'm Charlotte McLoud with investing news.com and this is Peter K with silver stock

investor thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time [Music]