Due to industrial demand and a shrinking supply, silver’s price will rise to $300, said Peter Krauth, Author of “The Great Silver Bull” and Editor of The Silver Stock Investor online.
Krauth discussed his predictions with David Lin, Anchor and Producer at Kitco News, at the PDAC 2022 Conference in Toronto.
Gold-Silver Ratios
In his book, “The Great Silver Bull,” Krauth derived a valuation of $300 silver through technical analysis. Among other factors, he examined the gold-silver price ratio, and found that it is above its historic mean. This “indicates the potential” for silver prices to rise higher.
“The ratio is 82 now,” he said. “If you look over the past 20 to 30 years, it has averaged about 55 to 60. So we’re already considerably above the average… If you look at how it has behaved, that’s a strong indicator of where silver is likely to trade relative to gold. So, the odds are that the ratio will come back down to at least 55 to 60. That’s a reasonable target. And in a speculative mania, I don’t see why it wouldn’t go back down to 15.”
Krauth agreed that the ratio could go as low as 9, since there are 9 ounces of silver mined for every ounce of extracted gold.
As of this article’s writing, the price of gold is $1,850 and silver’s price is $21.75, implying a gold-silver ratio above 80.
$5K gold
In his book, Krauth has a model which forecasts that gold’s price will rise to $5,000 by 2030, which would drag silver’s price up to $300. This is due to gold’s use as an inflation hedge.
“My thesis is that if you look at what’s happening with inflation, and if you look at how other assets are hurting,” he said, “then in fact, since the start of the year, gold is essentially flat… The odds [of gold reaching $5,000] are based on the rise in inflation and the growth in the money supply. And the odds are that [inflation and money supply growth] will be significantly higher than what we’ve been experiencing over the past 10 to 15 years.”
He added that he’s not the only one who predicts a gold price of at least $5,000.
“I’m not the only one who think that gold will go to $5,000 or even perhaps $10,000 in a speculative mania,” he explained. “You’ve got people like Jim Rickards, Shayne Maguire, who ran a gold fund for the Texas teacher’s retirement system, and you’ve got Scott Minerd of Guggenheim. And you’ve got the In Gold We Trust report, which forecasts a relatively easy forecast close to $5,000.”
To find out Krauth’s short-term silver price predictions, and his views on cryptocurrencies, watch the above video.
Follow David Lin on Twitter: @davidlin_TV (https://twitter.com/davidlin_TV)
Follow Kitco News on Twitter: @KitcoNewsNOW (https://twitter.com/KitcoNewsNOW)