Chris Marcus: I'll be Stunned if Silver is Still Around US$25 in a Year youtu.be
2021 kicked off on a strong note for silver, which enjoyed widespread attention and a price increase when the "silver squeeze" narrative grabbed mainstream media headlines.
What changed? Speaking to the Investing News Network, Arcadia Economics founder Chris Marcus said although it's turned out to be a historic year for silver, market manipulation has prevented further moves.
Marcus, who is also the author of the book "The Big Silver Short," pointed to comments from Jeff Currie of investment bank Goldman Sachs (NYSE:GS) and Rostin Behnam of the Commodity Futures Trading Commission (CFTC), saying they show how policies have been used to tamp down the price of the white metal.
"I know it's a bit shocking for people to hear, (although) some have been aware of this for a long time, when Bart Chilton, the former CFTC commissioner, detailed it quite clearly," he said.
"When you have ... all this metal purchased and the price goes down, people are wondering, 'Well, this doesn't add up, it seems like something is broken,'" Marcus added. "It's very similar to the end of 'The Big Short' ... (but) instead of mortgage defaulting, the paper silver market has already defaulted."
When asked about sentiment among silver investors, he said it can be hard to stay optimistic.
"It's tough living in a world where you see such a high level of corruption," Marcus said. "I think that's the part that's difficult for many to take — I think even the seasoned gold and silver guys are (getting to the point) where it's almost hard for them to get their hopes up and imagine that (market manipulation) could be coming to an end."
Even so, he's feeling positive about 2022, and said he'd be "stunned" if the precious metal was still around the US$25 per ounce level this time next year.
"Perhaps one specific marker to look for — I think you will see the powers that be do anything ... to keep silver below US$30. If you see silver above US$30 for a couple of days — say you see silver above US$30 on a Thursday and it goes up to US$31 or US$32 on Friday, and on Monday it's still in the US$30s. I would imagine at that point it may as well be US$50," said Marcus, adding that the situation is essentially the inverse of the mortgage bubble.
"Once (silver) goes through that break point, you'll know it when you see it, and I don't think it's going to take that much longer for that to occur," he concluded.
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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.
"If you see silver above US$30 for a couple of days ... I would imagine at that point it may as well be US$50," said Chris Marcus of Arcadia Economics.