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David Morgan

David Morgan

Mr. Morgan has been published in The Herald Tribune, Futures magazine, The Gold Newsletter, Resource Consultants, Resource World, Investment Rarities, The Idaho Observer, Barron's, and…

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2017 - A Sterling Year For Silver?

Silver bars

I have spent most of my life watching, writing, speaking, trading, investing, and listening to almost any and everything to do with the silver market. Given this, there are several insights that you (the market) have provided me over and over again, at a level rising to conviction about many retail silver market participants.

Although what is written from this point forward will be opinion only, some readers might interpret it to be factual - or at least based upon much experience.  Silver Investors - just like the metals themselves - are far more volatile than gold investors. To some people, silver can become a religion. The conviction of a true silver-bug is often comparable to that of a pit-bull. Being open-minded is not always the most highly-rated quality for this type of person.

Something far too many people are serious about, but which should really be taken with a grain of salt, is the annual price forecast for the precious metals.  In my journey, it seems there is always someone who claims to have hit the annual forecast number within a few percentage points every year...five years in a row! This kind of "hearsay" floats over the precious metals' market like a fine mist.

Well, I too have once again been asked to forecast the silver price for 2017, giving me the questionable privilege of putting it down in writing for all to see. Trolls who haven't done well on their own can use it as an excuse to become resentful, and others are afforded the "cost free" opportunity to either dwell upon my guess, or dismiss it out of hand. But regardless of how seriously a reader takes this information, he or she needs to realize that markets are dynamic - that they "know" more than any one firm, software program, or analyst.

True insights into the market are almost always based upon the laws of probability. Predicting human behavior anywhere close to 100% of the time is virtually impossible. High frequency traders using highly complex algorithms, as well as some market participants who are adept at day trading or playing video games for money, can sometimes predict price action within different time-frames.

Mexican Silver Libertad
Mexican Silver Libertad (Courtesy Hugo Salinas Price)


What I believe is NOT likely this year...

Let's examine what, in my considered opinion, is unlikely to take place in the silver market this year. First, I do not believe that silver will make a new intermediate term lower print - which means that the dip just below $14 basis the spot market near the end of 2015, was the intermediate term low.  There are many out in Internet-land who disagree with this statement. If you are one of them, and believe that my "conviction" is in error, by all means consider this a "freebee" to post your counter-point comments in the public forum.

Silver evokes such emotion in people! I still don't know why, but it has been obvious to me that on the one extreme are silver haters who shout out that silver is worth about as much as fertilizer, while others insist as an article of faith, that silver will trade at parity with gold - meaning that silver would have to outperform gold by a factor of seventy times!

Some prophets, with excellent followings, have predictive linguistics showing an eventual price of $600 per ounce silver. What makes this forecast so darned interesting, is not only how long it has appeared in the data, but that the real, so far unidentified driver would need to be industrial, given that a new important and significant essential use would demand such quantities, that silver would suddenly become "too valuable" for monetary purposes.

This is not a point I wish to belabor, but to partially validate their thesis, the qualities that silver possesses really do intrigue the imagination as to what the future could hold for its use in the electrical or battery area, not to mention some use(s) presently unforeseen.

A few others have forecast, and have made their respective arguments for a silver price of even $1000 or $10,000 per ounce.  In a world of digits where adding a "ten bagger" to an account is simply done by attaching an extra zero, we really cannot rule out any "number."

My take is simple… Before we get to a thousand dollars an ounce, let's get to $100!  Yes, my bold prediction in print so many years ago has not been achieved—YET!

And while you're waiting, take a serious look at the newest book which David Smith and I recently published, titled Second Chance: How to Make and Keep Big Money during the Coming Gold and Silver Shock-Wave. Many books talk about how to make a lot of money. But we also take the time to give you a plan - and a unique portfolio setup to use - about how to keep a large chunk, rather than giving it all back like most people will end up doing down the line. Our recommendations align with human nature, not against it. You may have missed the first moon shot to 2011. You may have held on until 2015. Or you may have sat out the big 2016 run. But it's not too late. Whether you're a Boomer or a Millennial, our book offers you a Second Chance to sit at the Winners' Table.

 

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