VIDEO - David Morgan: Silver Price Not Reflecting Market Activity

After briefly crossing the US$30 per ounce threshold earlier this week, the silver price has pulled back and was trading at about US$26.50 as of late Thursday (February 4). 

The white metal experienced a surge of attention last week as reports rolled in that members of Reddit’s WallStreetBets forum wanted to squeeze the silver market like they have for GameStop (NYSE:GME).

WallStreetBets users have since distanced themselves from silver, calling it a distraction from GameStop. But silver remains in the spotlight, with many waiting to see what happens next.

Speaking to the Investing News Network, David Morgan, publisher of the Morgan Report, said that right now the silver price doesn’t reflect what’s happening in the market.

“It’s acting like it’s the most ho-hum, boring market that you’d ever want to talk about … but that doesn’t reflect what’s going on, let me be crystal clear about that,” he said.

Morgan explained that there’s been strong demand for physical silver over the last week or so, with retail dealers in North America essentially sold out. Silver exchange-traded funds have also seen major inflows.

He said those high levels of demand aren’t having a sustained impact on silver because the paper market is in the driver’s seat. “If the physical market starts to take control of the price, then you could see where there’s some pain inflicted on someone that’s promised to deliver, but can’t,” noted Morgan.

Whether that happens remains to be seen. Morgan said he could see a silver squeeze occurring, but doesn’t think it would last. “I think a lot of people will be happy taking their fiat funny money,” he said.

He still believes in triple digit silver, but thinks it’s unlikely we’ll see that this year — he’s sticking to his US$40 prediction, which he made before all the GameStop activity began.

“(There’s still) a lot to be seen. I think it’s a lot more bullish than the price shows right now — I wouldn’t be surprised (if) a week from now, or the end of this month, we see a much different price in silver. But silver has surprised even me, so we’ll see,” Morgan 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.