Silver has experienced strong price momentum this year, but so far the white metal hasn’t been able to break through the key $30 per ounce level.
For David H. Smith, senior analyst at the Morgan Report and a contributor to Money Metals, it’s only a matter of time before that happens, and investors should make sure their portfolios are ready.
“The resistance level is around $30, and whether that happens within the next week or two, or it takes a month, (it’s) hard to say,” he told the Investing News Network. “Once it gets a couple of closes above $30, I think everybody is going to be jumping on board — the big funds and everything.”
In his view, market participants should be cautious about trading in and out of silver right now. He anticipates that the precious metal will keep running quickly after it moves through $30, and ultimately there may not be time to get back in.
“When this thing gets underway and decides to challenge the high $30s and into the $40s, I don’t think it’s going to take any prisoners,” Smith explained.
Looking at what’s been driving silver this year, Smith identified factors related to both supply and demand. On the supply side, he mentioned that silver was in its fourth year of declining production even before COVID-19 hit. Meanwhile, demand has been high enough that it’s been hard to get physical metal.
Smith emphasized that the important thing for investors to do is be prepared.
“I do think it’s the chance of a lifetime for investors now. And it’s an asymmetric chance of a lifetime — you don’t need to mortgage the house to do well, you can buy a modest position of physical, and a few good mining stocks and hold on. You may be shocked at what you see in just a few years in terms of the appreciation on both of those metrics,” he said.
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About the Author:
A widely recognized expert on silver, David Morgan began investing in stocks and precious metals as a teenager. He obtained degrees in finance and economics as well as engineering. Author of the book The Silver Manifesto, he has devoted more than 30 years to educating investors on opportunities to protect and grow their wealth. In addition to advising private clients and fund managers, he writes at The Morgan Report, covering economic news, the global economy, currency debasement, and stellar opportunities in precious metals and mining stocks.