David Morgan, author of the Morgan Report, spoke to INN about the precious metals market after the US presidential elections, the silver fix, and the effect of a possible Fed rate hike.
Last time INN spoke to The Morgan Report author David Morgan was right after Donald Trump won the US presidency, and prices of commodities were surging. He says, “A lot of people anticipated a rally, but it happened in a space of 24 hours.”
On election night, gold surged nearly 5 percent–its biggest single-day gain since June 2016. But when Trump took to the stage a few hours later, the price of gold plunged to $1,302.42. Gold dropped even further to $1,217.25 on a stronger US dollar and an anticipated Federal Reserve interest rate hike in December.
Morgan believes that metal prices are not going to see new lows, as “the low was [in] last year, November-December 2015. Certainly we’ve given back a lot of the gains.”
He also said that a Fed rate hike will not impact the precious metals market and said, it will have “very little effect–it is already priced into the market.”
The silver fix and its repercussions
INN asked Morgan about the latest development on silver price manipulation. He questions that maybe more is to be revealed and says that it can have a lot of repercussions on how the market will move forward in 2017.
Back in April, Deutsche Bank settled lawsuits on gold and silver price manipulation. Recently, court documents have resurfaced and UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms have been named as part of the silver market manipulation. The Financial Post reported that plaintiffs have now named other banks such as Barclays Plc, BNP Paribas Fortis SA, Standard Chartered Plc and Bank of America as part of the scheme.
He says, “Whether or not there is something different this time remains to be determined, but again maybe, just maybe, this time more will be revealed about the silver market.”
The silver lining
Morgan anticipates a better year ahead, and cited that, “The bull market that started in 2016 is still intact, even if this correction is a bit trying on us all.”
He also told INN about a unique technology that precipitates metals, calling it a “gamechanger”, which he has come across recently, “[T]his technology is a solution that’s inert.” He further adds that “[T]his will have a huge impact, not only on the mining industry, but will have a greater impact on the industrial sector at large.”
To know more about this technology, sign up for The Morgan Report.
Watch the full interview:
Full transcript below.
Nick Smith: Good morning. This is Nick Smith with the Investing News Network. I am delighted to be joined this morning by David Morgan, publisher of the Morgan Report. Good morning David.
David Morgan: Good morning Nick. Thank you.
NS: It’s been about a month since we last spoke and that was just after the US election. I wanted to get your thoughts on what we’re seeing in the last 30 days in regards to precious metals.
DM: Well we’ve seen a bit of a sell off. I mean a lot of people anticipated a big rally if Trump was elected and it happened basically in the space of 24 hours or less and since that time it’s been pretty much downhill. It looks like they’ve leveled off. There’s a lot of conjecture out there on the internet, some pretty well known commentators in the precious metal space are commenting that metals are going to hit a new low. I am opposed to that idea.
I think that the low was in last year November-December 2015, certainly we’ve given back a lot of the gains.
I can say with a bit of pride that the Morgan Report, which we do for our premium members where I time the market, we got out near the top. So anyone that followed us out, took some partial profits, hedged their positions, that type of thing. I did anticipate before the election that the market was topping at a great run in most of 2016, so I think we’re sideways, probably lower for the rest of the year. I really don’t expect much action to the upside of metals ‘til probably after Trump has sworn in on the 20th of January. But I’m still convinced, unless proven otherwise, that the bull market that started in 2016 is still intact even though the correction is a bit trying on us all.
NS: What impact do you think a Fed’s rate hike is going to have on precious metals?
DM: I think very little. I think it’s already priced into the market. The Fed, as I’ve said in my updates both publically and in my website to members, is that the Fed is basically following the market but not leading the market. The bond market is already set a higher interest rate on the 10 year note and the 30 year which means that the Fed will be raising rates just to catch up to what the market has already priced into the debt market. That’s a no brainer. The only thing that might throw a bit of a curveball in here is if the Fed goes at a greater percentage than the market anticipated. For example, I think the market’s already priced in 0.25 to 0.33 percent increase. But if it came out half a point or even greater than that, which I don’t anticipate but let’s say that it did, that might have some effect on the market across the board. It will probably affect all markets, bond market, stocks market, the metals market. But again I don’t anticipate that. The Fed’s very powerful there’s no doubt about it, but not as powerful as markets themselves.
NS: The Morgan Report covers precious metals and a lot of the commodity sector but you’re famed for your insight in the silver market. There’s been a lot of news and it’s been ongoing with regard to silver manipulation, specifically referring to Deutsche Bank. What are your thoughts on what we’re seeing there or just the general concept of these big organizations manipulating price?
DM: Well Nick thanks for the question. I’ll tell you this is the toughest one for me to be objective about. I try to, even with all my dealings in the silver and gold markets, and the natural resource sector. It’s everything that we do here at the Morgan Report with myself and two other analysts. It’s a pretty big team actually. First of all let me just point out for everybody that we do have a blog post, so to go to the main website which is basically a sales letter for the website members I mean I’ll be honest. We also give out a free report and e-letter for free every week that has great content. We have a lot of subscribers to that. Beyond that if you’re on the website don’t miss the blog.
We write on the website daily. Interviews like yours Nick they get posted on the blog. I do a lot of interviews. We take posts from other people that are worthwhile and also Twitter feed and YouTube channel. What I’m trying to say is people are put off by a landing page. It’s basically, let’s face it, it’s a sales letter. I’ll be honest about that. But there is stuff there that you should really be looking at, at least two or three times a week, especially if you are interested sector and if you want my opinion.
Coming back to your question. I do a weekly wrap up by video most weeks that I’m here. If I’m overseas it’s a little tough. And I did one over the weekend and that just got posted early this week talking about the fact that this could be opening up a little bit bigger investigation than what we’ve seen several times before that was US based. This one goes into a lot of other banks that Deutsche Bank has named. It’s basically across the board, Standard Chartered, UBS, Scotia Bank and there’s like four or five more.
I actually took the article and highlighted it which you could do with some of the software that we’re both familiar with. And I said it remains to be determined. I don’t want to be too optimistic but I think this might be the one that cracks the nut. Whether or not there’ll be something different this time remains again to be determined. But it might be a little more than a big fine, or what appears to be a big fine which is really a small slap on the wrist, and some kind of fine that these banks can conjure up in a matter of seconds with their ability to print money.
But nonetheless since it encompasses so many, that are interconnected and it seemed as if the authorities on the German side are taking this a lot more seriously. I really do want to state that maybe, just maybe this time more will be revealed. And if more is revealed here in the silver market, I think that could have a lot of repercussions for how the market moves forward let’s say in 2017.
NS: Excellent. I know that you do travel a lot in terms of getting out in the market and visiting projects and experts to help your subscribers profit from the market. What have you been up to in the last 30 days? Have you seen anything exciting?
DM: Yes quite a bit. I mean we did talk a little bit off camera and I met with a client at a trip to British Columbia, Vancouver, the junior mine capital of the world. The Morgan report since I started this service has always maintained a risk reward profile that is beneficial to the investor. It’s about the investor. It’s about the natural resources investor. It’s not just about silver or gold. It’s not natural resources. We’ve done all kinds of things across the spectrum but I’m not afraid to go out on a limb and speculate. There is a part of the asset allocation model which is top tier, mid tier and speculative situations.
Every time I see how this works out the amount of returns is phenomenal. I mean not only a 10 bagger sometimes a 20 bagger or a 30 bagger. This one is for anybody that’s already website member if you own everything across the board in the speculative sector. And I have a short list. I don’t like long lists. You’re probably going to get this in a spinout. I have to be careful about what I say because I cannot really disclose too much that’s not already in the public domain. But this is a technology that’s probably as instrumental as what took place in the gold and silver markets in the early 1980s.
To tell you a bit of a story Nick, and I’m sure you’re familiar with it but many people aren’t.
For years and years if you go back in even the 60s and 70s tons of analysts and in particular one, Jerome Smith, who was the silver guru in the last bull market, talked about this ongoing silver deficit. It’s only a question of time when we’ll basically run out of silver. That’s my words not his, but that was certainly the implication. Of course when I started speaking in the circuit back in the early 2000s one of the shows I did was a wealth protection conference in Phoenix, Arizona. The conference host asked me after I’d done my presentation and had taken a lot of the audience questions, “David we’ve heard about the silver deficit forever. You just told us about it and it really bothers me that we’ve been hearing about this for years and yet silver’s never really exploded. Why in the heck is that?” I said, “Because the idea was up until the early 1980s that the most silver that could be mined in any given year was about 350 million ounces and that’s a fact. You go back and check the data and don’t take my word for it. Go and research it.”
But what happened was the last time that the major book on silver’s deficit was published it wasn’t within a matter of a few months, that heap leaching was taking place to cyanide. When that took place it was a new technology in the precious metal sector and it’s absolutely profoundly changed the market which brought a heck of a lot more silver and gold to the upside to the market in other words up out of the ground and into the refiners than it had ever been produced before. This was a huge dynamic change in the market and basically this guy almost passed out. He goes “Oh my God I’ve asked every analyst, every speaker, everybody that I’ve ever had at this conference. Other conferences I’ve attended. I’ve gone on the internet and I have never got an answer. You’re the only one that gave me an answer!” I said, “Well thank you for the compliment. I had to read the book about it three times, but I figured it out.”
I said all this to say this Nick. This technology is a solution that’s inert. In other words you can actually drink it and it wouldn’t harm the body. It wouldn’t be very tasty but this precipitates out metals in general. This will have a huge impact on not only the mining industry but a greater impact through the industrial sector at large because it’s a solvent like water. Water is the greatest solvent in the world. You don’t make the Grand Canyon with cyanide you make it with water. I’m not saying this as water only. I’m saying it’s inert. This is something that I think is really going to be a game changer. I know I’ve said that before. I don’t like to be too hypey. I’m very excited about this.
I’m very happy that our loyal subscribers are going to benefit by this. Anybody that really is thinking about subscribing or not, give yourself a gift. Give yourself the gift of the Morgan Report this holiday season into the next year. The New Year is always – two things happen. One thing, people always want to get into better shape and lose weight for the most part, a lot of us. And secondly people want to get their financial house in order. This type of situation used to sell from the National Inflation Association which had a huge fall. They were touting stocks left and right. It was a thousand dollars just to get a name on the stock and a lot of times they were front running these people. And I do own this stock. I mean to be clear I recommended this before and it is in the portfolio already. But this is something that will be an add-on and adjunct to what we already own. I think it’s going to supersede everything this company is already doing.
So it’s something that’s speculative. You have to have the right frame of mind. You don’t want to overload. You don’t want to get the ranch on it. But it is something that you can watch the company grow. And if it grows half as well as I anticipate it will be a growth stock in the sector that will go on for quite some time.
NS: So it’s an inert substance that improves the metals recovery rates?
DM: Absolutely. It basically can – I’m not saying will, but could eliminate some of the processing steps that we’re familiar with so it’s very exciting. There’ll be more details to come. If the public domain gets this information in full I will invite the CEO to do a mastermind. We’re going to have a mastermind group that focuses on just this. We’ll be having the discussion with him to discuss exactly what this technology does, how it does it and what the investment implications are. I don’t know exactly when this is going to be in the public domain but I want people out there that visit your channel and mine to be aware of this opportunity.
NS: Fantastic. Well thank you very much. Is there anything else that you want to bring our audience up to speed with?
DM: Just relax over the holidays season and get ready for a rip roaring 2017, a new president elect. I’m not a big Trump train guy but I think it’s going to change the attitude for a while anyway and I think what he proposes to do will probably be more inflationary at the grassroots level, at Main street, not Wall Street level. I anticipate that 2017 will be a better year for the metals than 2016.
NS: Oh that’s fantastic. That will give us all something to smile about. Thank you very, very much.
DM: Thank you Nick for having me.
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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.