Transcription
And there's more than one why. Somebody had to stop in below, you know, 60. So, that triggered a bunch of uh, futures contracts to be sold because they didn't want to, you know, lose anything below the $60 level, [music] as an example. Someone else did it because they're worn out. Someone else did it 'cuz he needed the cash. Someone else did. So, there's lots of why. Uh, the big why that the mainstream financial press will tell you is dollar strength and potential interest [music] rate hikes. So, you nailed that one.
>> [music]
>> Hello everyone and welcome to another edition of Triangle Investor Interviews. I'm your host, Lucian Vukcevic, and before I announce my guest, just a quick reminder of a disclaimer. This interview and all my interviews are not a recommendation to buy or sell any shares, products, or services. Always do your due diligence and consult with your financial advisor. And joining us then next, a well-known precious metals analyst, investor, educator, the Silver Guru, Mr. David Morgan. Dave, thank you so much for joining me today. I always enjoy our session. So, today will be the same. Thank you.
>> Okay, very good. Well, thank you for inviting me. It's good to be back.
>> Thank you so much. Uh, let's start, of course, gold, silver prices, and everything that has to do with that. Gold has fallen below $4,000. Uh, silver, I believe the last time I checked, and that was a few minutes ago, 58. What is going on? Are the traders pricing in a rate hike that may never happen? But even if they do, it will be too little, too late to slow inflation. So, what's what's your take on the current price action of both silver and gold? That's my first question.
>> Yeah, very good. Well, my take is, you know, everyone wants a why. You know, interest rates going up, that's a why. Dollar strength, that's a why. But really, the market doesn't have a why. The market is, there's more selling pressure than buying pressure. That moves the market down, or there's more buying pressure than selling pressure. That moves the market up. And there's more than one why. Somebody had a stop in below, you know, 60. So, that triggered a bunch of futures contracts to be sold because they didn't want to, you know, lose anything close to $60 level as an example. Someone else did it because they're worn out. Someone else did it 'cuz he needed the cash. Someone else did. So, there's lots of whys. Uh, the big why that the mainstream financial press will tell you is dollar strength and potential interest rate hike. So, you nailed that one. Is that the reason?
>> Yeah.
>> It could have. It could be a reason for some people, maybe the institutions or whatever. But the main reason is there's more selling pressure. And I'm not really all that upset. Obviously, I want to see the price higher, and it's a quite a haircut from the $120 silver we saw in January. I mean, that's been cut in half or more than half. And the other problem is there's still these wide spreads. So, people that are in the physical market are really kind of taking a beating if they buy it at today's level. The markup, I don't know, and it varies dealer to dealer, but it's pretty close in most cases, not all. And they'll be paying a pretty high premium to buy. And if they want to sell because they need to, want to, have to, whatever, they're going to take a pretty good clip on the bid instead of getting the 58 spot price, which which norm has been normal for decades. They [clears throat] might have to take a $5 cut, $6 cut, depends again on the dealer. So, it's a bit discouraging to see, um, you know, where we are at the market, but I predicted that we'd see a sideways market. I said we'd see a trading range.
>> [clears throat]
>> Excuse me. We'd see a trading range two or at the 62 level. Obviously, we're below that now. We are in my buying zone. My buying zone for my members I put out, you know, a few days back, was 62 or lower. Don't buy everything at 62. Plan to buy between 62 and 50. Will we hit 50? I don't know. If we do, it wouldn't shock me. The reason being that many commodities, cotton, cocoa, soybean oil, or silver will, what I say, kiss the breakout point. The breakout point, as we all know, anyone who's studied silver for more than 5 minutes knows that 50 was the all-time high in in 1980 and 2011, or close to that in 2011. And it took decades to get out of that all-time high at 50, and it broke through last year. It's fiddled around the $50 level, went above it, below it, above it, and then it broke out to above 55 and rocketed it up to 120 very rapidly. And that's silver. That's how it moves.
>> So, we could play. Yeah, you said $52 silver could happen. What about gold? Where is the near-term bottom, if I may call it, for gold?
>> Well, I talked to a hedge fund manager 2 days ago, and I told him, you know, we have a a side bet. I told him gold's going under 4,000. And uh, let me look at the chart real quick. I'm doing it on my other screen, so that's why you're not seeing my face looking at the camera.
>> [clears throat]
>> I'll just do it on a real quick chart here. Yeah, there's support right here, and it's very weak support. Um, so it could bounce off the $4,000 level. The problem with gold and silver, too, is the real support at for gold is around 3,500. Will we get that low? I don't know. Just like silver, will we see 50? I don't know. 3,500 is the breakout point for gold, so what's good for the goose is good for the gander. I don't know. Could it? Yes. Will it? I don't know. If it does, it'd be like silver. It'd kiss it. It'd come down, be there for two or three trades and bounce up and probably move back up toward 4,000 pretty quickly. So, you want to be prepared for that mentally. And um, if it were to get to those levels, gold and or silver, uh, I can lock in that uh, many many futures players will lock in those prices because that'll be a gift. Especially on silver for the industrial side. Because if you're manufacturing solar panels, then you need silver and you can lock in 50, you're going to do it. So, uh, I wouldn't be that fearful. It'd be short-lived and we'd bounce right right back up. Could I be wrong on that? The answer's yes, but it's highly highly doubtful.
>> Yeah. Dave, but would you call this a herd mentality? I mean, people were hoarding silver in February when we had 120 back then. Now we have 58, and silver is almost hated today if you look at the sentiment. Is this a herd mentality?
>> Yeah, I would call it herd mentality. I mean, the problem with markets, and it's all markets, metals included, is people love to run with the herd. They feel safer when they're running with the herd. If all their neighbors are running the same direction and they're in the middle of the pack, they feel safe, feel protected, and they know they're right 'cuz all that momentum is moving the same direction. The problem is you want to be a contrarian. You want to be walking when everyone else is running or going in the opposite direction or whatever. So, it is a herd mentality, and now the herd's going to give up. "Oh my god, I should have never bought silver. I bought it $60 on the way up. I doubled my money. I didn't get out. I didn't know how to do it. I didn't want to take the poor offer." You know, it was 120. It was offered 100. I wasn't going to get clipped by 20 bucks.
In fact, I put out a PDF file for my members saying, "Okay, we're going to see 100 or better." And I said that well before it hit the $100 level plus. And here's how you get out. Smart, you know, judiciously. Get out of 20% at $80. Get out of 20% at $100. Get out of 20% more. So, sell it in tranches. And you know, one of my guys got out at 80, and I'm sure several did, but I don't talk to everybody. I've got, you know, lots of subscribers. And um, he was not all that happy that, you know, he could have got at 100 and maybe sold more at 100. I didn't talk to him later, but point being, he's probably happy as could be right now. Because he got 80, maybe got 70 for, I know what his dealer actually offered him at $80 silver, maybe 75. I don't know. Point being is he's now at, you know, 58, and he's glad he offed some of silver.
Plus, my my membership base, and quite honestly, and I'm, you know, not ashamed at all. In fact, I'm kind of proud in a way that it's mostly people, you know, 55 and older. Of course, they have some young people in there, you know, some 20 and 30-year-olds, some 40-year-olds, but the majority, probably 60% or 65% are, you know, 55 and up. And so, they want to start taking some profits, especially some that are retirement or whatever. So, anyway, I'm rambling on. Bring me back, but I just want people to know that you can't go broke taking a profit. Yes, you're getting fiat for it. What do you do with the fiat? That's the question, you know. Do you put it into, you know, platinum? Do you put it into real estate? Do you pay off bills? Do you buy a house? What do you do? That's. That's a nice problem to have. I got a pretty big windfall here. What I do with it? You figure it out.
>> Yeah. Yeah. Let's move from the short-term noise to a macro picture. The Silver Institute is now talking about six consecutive annual silver deficit with cumulative drawdowns exceeding 760 million, if I'm not mistaken, ounces since 2021. At what point does a multi-year deficit become impossible for the market to really ignore? Everybody knows about this silver deficit, but somehow I think the market ignores it.
>> Yeah, well, we have a precedent for that. And this is something that most people don't know, and, you know, silver guru or not, the facts are, there was a silver deficit previously from 1990 through and inclusive 2005. There was a silver deficit for 15 consecutive years, year-over-year. And the average drawdown was 100 million ounces per year. From 1990 to 2005 inclusive, the market withdrew the above-ground stockpile down 1.5 billion ounces. And that was probably the lowest above ground stock pile silver in my lifetime. 500 million ounces or thereabouts. So, we're really skinny on 1,000 oz bars. And yet, if you look at the price chart during that time, it hardly budges.
It was only after we hit that we started rebuilding above ground stock piles 'cuz the mining activity started increasing uh, around the early 2000s. And the stock pile started to build up again. So, my point is if you go by the past history, you could have a large deficit and not have much price movement. Well, we've already seen huge price movement. You know, we saw silver go from 50 to 120 and now back down to 58. So, that's not true in this deficit situation. So, we can rule that out. So, what effect will it have? I'm not sure. It has to have some. But maybe not as much as people expect.
I think what would have the biggest move in silver, of course, is buying pressure. So, that's number one. But the buying pressure could be government induced because being a critical mineral, I call strategic, if the US government says we need to stock pile 100 million ounces of silver over the next two two years, and they came into the market on a quarterly basis or whatever, I think just that knowledge of silver investors would add probably 10 or 20 bucks to the price of silver over time pretty rapidly. In other words, it would probably put a floor into the silver market. So, I think that'd be number one.
Number two would be something like that from another foreign power because Russia stock piles silver for strategic purposes. China's pretty mum about what they use it for, although we know a lot of solar panels, but they are very strict about, you know, the import of concentrate. They export it out to the people that imported it. But they're pretty careful about what they have in house stays in house. In other words, what's mined in China. And some of what's refined from external sources still remains in China, but not all of it. Most of it is a contract basis. It's this much silver and we get it refined and we get that much back out. Although contracts often are they'll hold the payment not in yuan or US dollars, but they'll hold it in metal. So, if I ship a million dollars of, or excuse me, a million ounces of silver in concentrate form, once it's refined, it's a million ounces. And they may take 5%, making up the number, small percent in silver itself. So, uh, but the idea that silver's not going to be exported from China is ridiculous.
>> Yeah. Returning to the deficit forecast, actually for this year, I believe it's 46 million for 2026 expected. Uh, do you see, do you expect any surprises with this number for 2026?
>> I don't. I mean, I'm not a, you know, I'm pretty neutral to positive on the Silver Institute. I mean, there's a lot of critics. You know, you try to get all those numbers right every year. You know, it's not that easy. And I think the reason that it could be 46 versus, you know, 100 million or whatever. People don't realize how much silver was sold back to the market above $50 an ounce. I mean, there were a lot of people that figured 50 is as high as it would ever get. And that's why it walled around for about 2 months. People were buying and selling. Some are saying it's breaking out, some were saying it's done. Some were saying it's breaking out, some were saying it's done. The market took a couple months to figure out it wasn't a fake out, it was a breakout, and we saw the big move.
Point being is that 50 got a lot of metal, 60, 70 some, 80 some, 100 some. And now on the way down, people said, "You know, I'm not, you know, I'm not going to take this all the way back down to 50. You know, I'm getting out. If it hits 70 and it stays there three days in a row, I'm out." And that type of thing.
So, the point being is there's a lot of silver in refineries that has not been refined into 1,000 oz bars yet. How much is that? I don't know. I know they're backlogged. And I know it's, I would say, a significant amount. And I would say that that does play into the market 'cuz remember, the leverage in the futures market can be, you know, as low as two or three to one, as high as 100 to one. And right now, I haven't looked in a while, it's fairly low. There's not a lot of leverage in the futures markets right now.
Nonetheless, a 1,000 oz bar is the real deal, and if there's more of those coming in to be shelved because the market retail is flat. No one is buying and no one is selling. So, someone has to be the buyer of last resort, and of course, that's the bullion banks. And they buy it near, you know, production cost, and they shelved it. In other words, they stock piled in the Comex, or at the LBMA, or in the Shanghai Exchange. And that's where it goes until the market starts to move in and someone makes an offer to buy it at a higher price, or bids it, and the the seller takes a lower price. That's how markets move. So, I'm not trying to imply that there's a huge amount out there on the sidelines ready to flood the market with physical silver. I'm not saying that. What I am saying is that there is an amount out there that will come into the market.
>> Yeah, like I said, a lot of moving parts here, but what single metric are you watching most closely right now? COMEX inventories, lease rates, exchange inventories, retail premiums, mine production. What's the one?
>> ...are givens. I'm watching China. When China starts buying physical like they did the last two or three months of night of 2025, that to me is the key. So, if I start to see physical metal moving into the Shanghai Futures Exchange and the Shanghai Exchange, they're different. They're two entities. Uh, that will be a key to me that they're stockpiling for both industry and investment purposes. And that's what drove the market last time, and I expect it to drive the market this next time. That's key.
The other one's lease rates. When you start to see, so, first is China, a close second is lease rates. Lease rates tell me and the and the market, "I need it and I need it now." And if lease rates go high and they can't get it anywhere else, because they can't pull it off a shelf, they've got to lease it. And they can lease it for pennies on the dollar, the market's got plenty. If they shoot the lease rates up, it's like, "I got to have it. I got to have it now, and I got to pay for it, but I'm paying for it 'cuz I have to have it." So, that's number two. The rest, it's pretty well in the equation already. Yeah.
>> Uh, we saw uh, gold gold and silver equities uh, lagging when the price exploded. Uh, can we expect a different scenario maybe this time, a decoupling of uh, uh, gold and silver equities uh, when you when we compare them to the gold and silver metal prices? Could we see that?
>> Yes. You know, I'm always learning more. I've never said, you know, I I had it all figured out. But, very often uh, in the past, silver led gold. Silver would break out before gold. Now, gold is leading. And it. So, what uh, my early beliefs were when I was your age or younger, it was like silver was going to lead. And that was true most of the time. And the other adage was that the equities led. And that's not true anymore. So, markets do ebb and flow, go back and forth. But, I wouldn't be shocked to see silver and gold stock, particularly silver stock, start to move up out of nowhere. And silver's still flat. I'm feeling, "What the heck's going on with silver stocks?" And it's sophisticated investors, their algorithms, whatever, inside information. They know what next quarter's earnings look like. It's the best value you can buy. I mean, the value stocks right now are the mining stocks. So, for a variety of factors, you could see a move up in the equities 'cuz they're dirt cheap ahead of the actual move in the metals. In fact, to be quite honest, I'll stick my neck out again and say I think that's maybe what will happen this time. And it might be a subtle clue that most people aren't looking for.
>> Okay, let's make this more interesting. Uh, imagine we are sitting here again on June 24th, 2027. So, a year from now. Which number would surprise you the least? Gold at 3K or gold at 7K or 6K? Or silver at 50 or silver at 150?
>> Yeah, at the bottoms. I don't expect. You know, I've been an advocate for 90% of the move comes in the last 10% of the time. Gold's bull market started in year 2000. We're in 26 years later. 10% of 26 is like 2 and 1/2 years. We broke out in gold in um, July uh, 2025. So, we're almost a year in. So, if 10% of the move is in 2 years, and we're a year in now, and then a year out, we'd be in a 2-year time frame, and we should be peaking or thereabouts. Now, does that mean I'm right? It does not. But, that's how markets move. You get the last leg up in the Elliott wave, the fifth wave in Elliott parlance, or in just general markets, the final phase, the herd comes in and moves like crazy.
And if we have a dollar devaluation, we have a, you know, a stock market fall off, a real estate uh, dump, and the metals are like the one and only place to go. And it's such a small market, especially silver, you could see the kind of move we saw in January repeat. And in fact, that's what I pretty much expect.
Now, the 90% of the move in 10% of the time it did take place in 1980. I can prove it. Does that guarantee it happens in 2027? The answer is no. There's a lot of analysts that don't agree with me. They'd say this market's going another 10 years, and that type of thing. I doubt it for two reasons. One, that's not how markets move. Secondly, I think there'll be a reset of the whole site financial system with a new digital-based currency system. So, I think for those two reasons, we probably will see a peak in the metals sooner than later. But again, I'm willing to say, you know, the market knows more than me, and time will tell.
>> Of course. Uh, final question, just returning to the thing you said over here, digital uh, currency, it will. Do you think it will be backed by hard asset, by gold, by silver, by I don't know, any other asset class? How do you see that digital currency future uh, for, let's say, in the United States? How do you see it?
>> I see that it'll be a private party, like a JP Morgan. I don't think the Fed will be introducing a central bank digital currency. So, it'll be, it'll be JP Morgan or some big bank, probably. And there could be multiples. You could have a currency based on Amazon, for example.
But I've rethought it, and I do think there will be competition. So, I think there's a probability, not a real high one, but a good probability, that you will see the XYZ gold-backed token tokenized gold currency. And we already have them, you know? I mean, there's Kinesis, there's Glint, there's some others. And I'm not sure that the governments will be able to smash them out and say, "You can't use these."
I think what they will do is make them non-productive as- sets, or I should say payment systems for utilities, government-controlled water, government-controlled perhaps housing under a FHA Federal Housing Administration loan. But you might be able to use it for a house on a private party basis. Or for an automobile on a private party basis. But if you're going to use it for bank lending, you probably won't be able to.
But that would be kind of an interesting concept to have a gold back back token that can be used in private commerce, and I'm not sure that the government would be able to wipe it out. They might be able to control, as I just said, you couldn't use it against uh, the normal new banking system, but you might be able to use it on a private party basis, which would be pretty awesome. Because the market has a way of of taking care of things in a true free market. Which means the preferred money would eventually take over the, you know, the the bad money. So, you might see that. So, I'm not giving up. I'm not sure just because the controllers want further control over the working class population of the world that it's absolutely going to happen. There could be enough pushback that maybe they don't get there or it's modified enough where privacy is retained and the control is less than anticipated.
>> Wise words. Dave, thank you so much for joining me today, but before I let you go, please tell my audience how can they reach out to you and become your subscribers?
>> Yeah, the best thing is go to the main website, themorganreport.com, sign up for the free email list, step one, on the left-hand box on the website. Step two is watch the two documentaries, and step three is you want to consult or get on a premium service. Uh, go ahead and click that box and see the offers made.
>> Dave, thank you so much.
>> My pleasure. Thank you.