Don't Let the Silver (and Gold) Bull Shake You Off! / Commodities / Gold & Silver 2020

Gold and silver exchange-traded funds (ETFs), a measure of large investor interest, areexperiencing outflows as opposed to an almost interrupted inflow over the lastfew months.

Mining stocks which either look for orproduce these metals have been moving sideways, testing the "mettle"of even perma-bulls.

Many investors see these as negative signs. But I view it as a Mr. Market's last big effort to"shake the tree," causing as many people as possible to fall off thegalloping bull and head for cover.

As David Morgan hasso aptly – and during times like this, often said, "A preciousmetals' bull run (especially that of silver) will either wear you out our scareyou out!

These gold and silver ETF outflows shouldbe viewed like an almost parallel universe compared to the continuing robustphysical demand for these metals on the part of investors – both large andsmall.

Buy When Others Are Selling

ETF in/outflows represent "hot money." But you are an"investor" not a speculator.

Buy value (physical silver and gold) in tranches (portions) andhold it for insurance, liquidity, and price protection against your otherassets. And along the way, there's a good chance that you'll turn a profit too.

Now with the central banks' moving towarddigital currencies, you have – in your hand, to which no one else has a claim –what has for 5,000 years served humankind as honest money.

With it, you retain flexibility(liquidity), privacy, and diversification, because its price tends to move in anon-correlated way to most other assets.

And it gives you peace of mind, because youknow that in either inflation or deflation, there will always be a finiteamount of metal available. Unlike fiat (paper currency) which can and will be"printed" in unlimited amounts as governments attempt to solve theirmistakes in monetary policy by increasing the quantity in circulation (eitherdigitally or physically) to infinity.

Over time,silver's price tends to mirror that of gold.

An Anecdote from One of the Best "Trend Turn Callers"in the Business

Bob Moriarty of 321gold.com hason multiple occasions, demonstrated an unerring sense of timing in regard tointermediate turns in the metals, especially silver.

Understanding that the people who buy andsell them probably have a better finger on the pulse of supply/demand factorsthan most analysts, he has an open order with one dealer, saying "Somebody'sgoing to want to sell something soon. When they do, call me and I'll be abuyer...

“And sure enough I got a call from a dealersaying "Somebody just sold us some big silver bars; are you a buyer?"And I said 'Yes.' This has happened to me several times over the years and everytime, it has marked the low within a few days."

Bob demonstrates he's able to remove hisbias and emotions by taking an additional step away from market noise, lettinganother person's fear alert him that it's time to add to his own holdings.

It's watching the antics of herd-behaviorwithout allowing yourself to become consumed by it. And by the way, theseoccurrences are repetitive – going much farther back than the infamous SouthSea Bubble – and will remain operative and predictable just as far into thefuture.

Silver's Eventual Trajectory May Be Similar to Bitcoin

This year BTC rose from its cyclical lowaround $3,500 to $12,000 and then $14,000, where the "experts"expected it to be stopped by strong chart resistance. Instead, in just a fewweeks, it powered higher to challenge the all-time high of $20,000 each.

On a smaller scale, silver did somethingsimilar when it rose above $20, and instead of spending months backing andfilling between $18 and $21, it shot up to just under $30/ounce.

When silver finally decides to begin itsnext powerful impulse leg to the upside, expect it to keep confounding thetechnicians as it tears through chart "resistance" levels, just asBTC has been doing.

As one metals' dealer recently statedpublicly, "As the paper price of silver falls, even though it issomewhat if not totally counterintuitive to what we would expect, the physicaldemand is stronger and stronger, as the price falls more and more."

Furthermore, he said recently, "Onthe COMEX, we're seeing as much silver being pulled off the exchange by thesubsection called "Others" – sovereign nations, businesses, andwealthy people – during every recent delivery month as is usually the case in atypical year." (Typically, the categories involved in thisactivity would be the Speculators (hedge funds) vs. the Commercial Banks.)

Another eventual similarity? Now that BTCseems to be going mainstream, it has been announced that between PayPal andSquare alone, all of the bitcoin "mined" in 2020 has been spoken for.Thus, anyone else who desires to own even a fractional "coin" mustpurchase it from someone who already owns it.

If bitcoin can rise and stay above $20,000,every current owner will be holding at a profit, with few being willing to partwith their holdings until much higher prices are reached.

Now imagine this scenario for silver.

At some point going forward, investordemand, along with a few big industrial users - think EV manufacturers,electronics or solar panel producers - decide to "lay in" large quantities,or even buy outright a mining producer as Tesla has been looking to do withnickel.

What do you think might happen to silverprices – and premiums – if "all of the silver mined globally in a year hasbeen spoken for"?

David Smith isSenior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com aswell as the LODE Cryptographic Silver Monetary System Project. He hasinvestigated precious metals’ mines and exploration sites in Argentina, Chile,Peru, Mexico, Bolivia, China, Canada and the U.S. He shares resource sectorobservations withr eaders, the media and North American investment conferenceattendees.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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