I won’t read you the whole thing but a few highlights. Fourth consecutive year of a structural deficit driven primarily by increasing industrial demand well by overall demand and yes of course industrial demand is the lion’s share of the demand in the silver market at this time. And this weekly goes further into talking about some of the factors. One of them is the problem is accentuated by the prevalence of silver streaming deals at key based metal mines. Producers offer and intuit these agreements because silver does not drive the core economics of their operations allowing them to trade silver revenues for lower cost of capital.

Extremity and royalty agreements now account for about four percent of total supply further disconnecting by-product silver production from silver market fundamentals. You see here in this pie chart over here that currently silver primary silver miners which there’s no such thing as a pure silver mine it’s a it’s a mine where the bottom line revenues are predominantly silver dominant in other words over the majority of the revenues come from silver but usually it’s a lead zinc silver mine a copper silver mine a gold silver mine again there’s nothing like a such as a pure silver mine although there have been in the past some that were almost that way there are very few that are on that profile right now regardless gold has actually come up to go back 10 years it was about 13 percent lead zinc going back the same time frame about 35 percent the copper is always hung in there right around 25 percent but this is you know very much what it’s been for a very long time give or take a couple of percent a real key here is what’s accounting for this basically structural deficit meaning will mining be able to make up for it and it said supply is signed from the peak the reduction is in part due to decreasing ore grades and this is rather significant or grades have been decreasing over time i think tavi tavi costa put up something on linkedin recently showing the ore grade degradation between mexico and peru i’m pretty sure it was him he really puts up some good stuff and all attributed to him i could be wrong but my memory is pretty sharp and this is key as i just said rising production cost of further constrained silver supply take a look at this it’s really going up high and it’s actually above what they’re showing here the end of 2023 it’s not far off but actually it’s greater than that it’s more like around 28 or so but i’m not going to argue with metals focus point being is if you’re mining 30 silver costs you 28 two dollar margin isn’t that much especially in the mining business when you have to go out and get new reserves all the time remember the best gold mine silver mine the world ends in failure once you’ve had a let’s say very profitable very high margin mine uh very high grade uh once you get the last ounce out of it it’s done you’re done you have to uh bring it back depending on the jurisdiction so there’s costs involved with restoring the land and then uh you better find something else so these companies are always out looking to replace reserves and if the reserves are not there or let’s say what is available as a lower and lower grade obviously the costs are going to continue higher and of course what we all know the time in our new supply will be critical as development of a mine takes many years this instance implausible that new production could balance the current deficits over the short to medium term although short falls and we are instead dependent on recycling and demand to retract the forecast price rally this would come soonest in the price sensitive areas mainly jewelry and silverware that’s true although what’s interesting as gold continues to go higher uh people may switch to silver jewelry because it’s cheaper than gold and silverware is about four percent in the market and i don’t think it really affects it that much could it certainly is it price sensitive yes but it really is a minor component and this is a week ago but you know if you look at it here it looks like it’s sort of topping out we did get you know a little more up here this last week silver is always tougher to analyze i mean it’s really hard to say what it’s doing here basically what we’ve got is kind of a top here around the 32 and a half level right in this area it didn’t get higher there slightly lower hard to say i’ve been telling the public and our membership that i think we were here for due for pause here but it’s tough because it won’t take much to trigger these markets but there are a lot of fundamentals that could trigger it higher that haven’t i.e what’s going on with israel and iran at the moment and it hasn’t brought it higher but you know monday could open very high i’m not going to say i usually like i’ve said in the past the contrarians contrarian almost everybody that at least that i pay attention to is forecasting you know the breakouts imminent and that kind of thing i don’t know i think we could see a pause here for a month maybe six weeks maybe more like some kind of sell off like we got early in the week last week or and or i should say this week and uh it surprised a lot of people then of course it bounced back later and regardless of what you think about the gold silver ratio it is important from some aspects it does tell you how many ounces of silver you need to buy an ounce of gold right now we’ve been above 80 for quite some time as you can see here uh this is just weeks but if you look at a yearly chart i’m looking at 80 it’s not even on here but once you get below 80 on the gold silver ratio and stay there i think that’s really one of the cues that we’ll look for to determine that silvers not only continue to outperform gold but probably at the breakout point it wouldn’t surprise me to see that ratio uh above 33 32 and a half at least and again it needs to maintain it once it does that and 32 and a half 33 becomes the support rather than resistance as many of us have stated there isn’t a whole lot of upside resistance beyond that so we could or should get an acceleration and getting near the end of this metals focus update i show you the etp holdings it’s interesting as you look on uh four metals i’m talking about gold and silver here but uh really the etp holdings back in you know 2020 uh were higher than they are now for gold and same thing for silver same thing for platinum palladium’s a different story but i find it a bit interesting because you know we had the illness and you know a lot of money went into the precious metals due to the uncertainty of you know all kinds of things short supply shortages uh how bad was it going to be uh all kinds of business closures and everything that went into that now i won’t review it any further but point being is that that brought a higher demand than we’re seeing now where we have a lot of you know banking issues what’s china really doing and of course the wars that we continually speak about to find a rather interesting in a way that that was you know higher for physical metal going into the etps versus now but that doesn’t mean that you know going out a couple years it won’t be higher in fact i expect that it will be just a couple more this is from reuters on the eighth few days back gold silver biggest drop in over a month is bets on large fed rate cuts we cede uh yes it’s interest rate sensitive not as much as a lot of people think when we are true interest rates are still not commensurate with the true inflation rate but again as i showed you this is an article sort of backs up what i’m thinking doesn’t mean we’re right but put it out there for you i find this from bluebird rather interesting in a way because headlines crosscoes go bars fly off shelves as boy enterprises smash records because the retail demand in the north america uh has been really rather pitiful in a way i mean there really is not that much going on the retail side of the dealers the wholesalers are really full of product but of course it continues in the east but maybe uh costco’s become one of the major outlets read the article basically indicates you know there’s been a lot of metal gold sold from the costco stores and i’ll go ahead and finish up with this one this is from the jerusalem post silver miners need 2.1 trillion by 2050 to meet demand kind of goes back the beginning of the sweeping perspective there is an above ground supply of silver that will have to be used to meet the deficits for many years going forward based on what we know that today so that will conclude it for this week’s weekly perspective this is david morgan of the morgan report.com
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