(Kitco News) – There is a significant disconnect in the silver market between investment demand in paper and physical bullion, and this is an environment where profits are made, according to one market analyst.
Silver appears to be building a solid floor between $17 and $18 an ounce, and while markets could remain volatile through the short-term, current prices represent long-term value, said Peter Krauth, founder of the Silver Stock Investor newsletter and author of a recently released book, The Great Silver Bull.
Krauth added that he sees $18 an ounce as solid long-term support for silver, which represents the average all-in-sustaining costs for silver producers. “When silver goes to $18, you should definitely be buying,” he said. I don’t see it going sustainably lower because that would put the market’s supply and demand imbalance further out of whack,” he said in an interview with Kitco News.
Krauth’s bullish outlook for silver comes as the precious metal has seen solid selling pressure through most of 2022 and has significantly underperformed gold as recession fears have weighed on industrial demand. Rising interest rates, pushing the U.S. dollar to a 20-year high