Top Stories This Week: Silver Price Breakout Timeline, Powell Talks Inflation

It’s been a week of ups and downs for the gold price, which broke the US$1,830 per ounce mark during the period, but was back down around US$1,810 on Friday (July 16).

Attention has been focused on comments from US Federal Reserve Chair Jerome Powell, who testified before a Senate committee on Thursday (July 15).

Among other things, Powell was questioned about inflation, which he has previously described as “transitory.” This time around, he admitted it is “well above target.”

“We’ve said that we would begin to reduce our asset purchases when we feel that the economy has achieved substantial further progress measured from last December. We’re in active consideration of that now” — Jerome Powell, US Federal Reserve

Talk is beginning to surface about whether President Joe Biden will replace Powell at the end of his term as Fed chair in February. Powell has held the position since February 2018. 

With the gold price improving, how is its sister metal silver doing? The white metal has had a bumpy ride in 2021, but so far in July it’s mostly kept above US$26 per ounce.

I spoke this week with David H. Smith of the Morgan Report, who said while US$30 has been a point of resistance for silver for some time, he sees the situation changing as Labor Day approaches.

He’s not sure if it will pass US$50 this year, but said quite a few people he respects think that it will.

David also made an interesting comment about silver supply, noting that about 70 percent of silver is produced as a by-product of other metals, including copper. 

More copper mines are seen coming online in the next 10 to 15 years, but David pointed out that this will probably happen slowly; what’s more, these upcoming copper mines may not have as many silver credits as people are expecting. This of course has implications for the silver price as well as supply.

“The assumption is there’ll be new copper deposits coming on board, and when that happens there’ll be a lot of new silver since so much of it is a by-product of copper production. But my premise is that there won’t be that many deposits coming on because they take a long time to get to the production stage” — David H. Smith, The Morgan Report

With the future of silver in mind, we asked our Twitter followers this week where they think the precious metal‘s price will be at the end of the third quarter. By the time voting wrapped up, the US$25 to US$30 range had the most votes. Interestingly, the “above US$35” option was in second place.

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

Finally, in the cannabis space, INN’s Bryan Mc Govern asked market experts for an update on beverages, which are in the spotlight in Canada once again.

Cannabis beverages first came into view during the country’s “Cannabis 2.0” legalization stage, which centered on non-smokeable products. They’ve struggled to thrive since then — for example, Ontario Cannabis Store data shows only 1.5 percent of sales came from drinks from April 2020 to March 2021.

The challenges for beverages are fairly broad. Cannabis companies operating in Canada have pointed to factors such as the country’s strict marketing regulations, as well as the fact that unlike alcohol, cannabis drinks can’t be sold in bars and other venues. Some market watchers think that could change this summer as new products hit the shelves, but for now that remains to be seen. 

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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.