Silver has a reputation for being volatile, but while the metal has seem some price swings this year, its overall path has been up.
Speaking at the Precious Metals Summit in Beaver Creek, Colorado, Dr. Peter Megaw, chief exploration officer at MAG Silver (TSX:MAG,NYSEAMERICAN:MAG), shared his ideas on what’s behind silver’s move.
“I think what’s changed is global economic uncertainty, which has driven up the price of gold. Silver tends to follow gold, and when silver breaks out it tends to break out much farther than gold,” he said.
A higher silver price is beneficial for Mexico-focused MAG for a number of reasons, but Megaw emphasized that, for the company, that’s not a requirement for success.
“We get much more investor interest, we get a higher share price out of it. It doesn’t necessarily affect the economics of what we’re doing because our grade is so high, but a higher price is always good for us,” he explained on the sidelines of the show.
When asked where he sees the silver price heading moving forward, Megaw again pointed to the white metal’s relationship with gold.
“I suspect that silver will continue to do what it’s been doing, which is going up and going down again, which causes heartburn and sleepless nights for many people in the industry,” he said.
“But I think it depends a lot on gold; it depends on the trade situation between the US and China, and the sort of deliberate fomenting of political and economic uncertainty. A lot depends on how Donald Trump feels on any given morning whether the price is going up or down.”
Overall, Megaw hopes to see a measured rise in the silver price rather than a rapid increase.
“The higher something goes, the higher something can fall, and the faster it goes up, the faster it goes down,” he said. “That does not do good things for sustaining people’s interest and confidence in the market sector. So we would like to see a steadier increase.”
Watch the interview above for more from Megaw on silver and on MAG’s plans for the rest of the year and beyond. Our full playlist for the Precious Metals Summit can be found 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.
