Where are gold and silver prices headed after last year’s relatively flat performance?
Jeff Clark of TheGoldAdvisor.com sees both metals moving upward, and when it comes to gold he said it will be important to watch the US Federal Reserve, which will at some point move from tightening interest rates to easing.
“I think that reversal — going from a tightening to an easing cycle — could easily be one instigator that lights a fire under gold,” he said, adding that while the Fed has been aggressive with its hikes so far, a turnaround may not be far away.
“The average time frame from the last rate hike to the first rate cut is only five months — that’s it, that’s the average,” Clark said. “The longest was 13 months from the last rate hike to the first rate cut. But the average is five months.”
When it comes to silver, he highlighted the importance of investment demand, saying that a substantial price rise requires both physical and exchange-traded fund (ETF) purchases to move higher together.
Physical demand was strong in 2022, but ETF demand was below average. However, 2023 could be different.
“I think there’s a good chance that we see that this year,” said Clark. “And if we do, if we see institutional and fund managers come in — and there’s some evidence of that already — I think silver is going to rise this year and perhaps substantially.”
Importantly for investors, a rise in the silver price should bring outsized gains for silver stocks.
“I’m in the camp that thinks silver is going to be up in the US$30 (per ounce) range. It wouldn’t surprise me at all,” said Clark. “And what’s interesting is if that materializes, we’re going to see an exponential move in some of the miners, the more promising mining stocks. Not all of them, but some of them are going to do two, three, four times what the rise in silver does”
Watch the interview above for more from Clark, and click here to learn about “Paydirt,” his new book. You can also click here for the Investing News Network’s full Vancouver Resource Investment Conference playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.