Peter Krauth, author of The Great Silver Bull and online editor of The Silver Stock Investor, said that due to industrial demand and shrinking supply, the price of silver would rise to $300.
Kruth discussed his expectations with David Lane, broadcaster and producer for Kitco News, at the PDAC 2022 conference in Toronto.
Ratios of gold and silver
In his book The Great Silver Bull, Krauth derived a $300 valuation of silver through technical analysis. Among other factors, he examined the gold-to-silver price ratio, and found it to be higher than its historical average. This “indicates the possibility” of an increase in silver prices.
He said: “The ratio is now 82″. “If you look over the last 20-30 years, it has averaged around 55-60. So we are really well above average…If you look at how it behaves, it’s a strong indication of where silver is likely to be trading Relative to gold. So, odds are that the ratio will return to at least 55 to 60. That’s a reasonable target. And in speculative mania, I don’t understand why it hasn’t fallen back to 15.”
Krauth agreed that the ratio could be as low as 9, given that there are 9 ounces of silver mined for every ounce of gold mined.
As of writing this article, the price of gold is $1,850 and the price of silver is $21.75, which means that the ratio of gold to silver is above 80.
5 karat gold
In his book, Krauth has a model that predicts that the price of gold will rise to $5,000 by 2030, potentially driving the price of silver to $300. This is due to the use of gold as a hedge against inflation.
He said, “My thesis is that if you look at what’s going on with inflation, if you look at how other assets are hurt, then, in fact, since the beginning of the year, gold has been basically flat… the odds are. [of gold reaching $5,000] They are based on high inflation and growth in the money supply. And the odds are that [inflation and money supply growth] It will be much higher than what we have seen in the past 10 to 15 years.”
He added that he was not the only one who predicted the price of gold at at least $5,000.
“I’m not the only one who thinks gold will hit $5,000 or maybe $10,000 in the speculative frenzy,” he explained. “You have people like Jim Rickards, Shane Maguire, who ran a gold fund for the Texas Teachers’ Retirement System, you have Scott Minerd from the Guggenheim. And you have the In Gold We Trust report, which projects a relatively easy forecast close to $5,000.”
For Krauth’s short-term silver price predictions, and his views on cryptocurrencies, watch the video above.
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