Silver Price Explosion🚨Expert on Shortages, Corrections & Future Outlook - Peter Krauth

inventories in China had reached 10-year lows and I believe those are perhaps all-time lows for them because their exchange hasn't been around all that

long. So, it's assumed that likely uh

long. So, it's assumed that likely uh significant inventories were shifted from from Shanghai to London. And I I

compared this to what we call a shell game. So, you have shells and you have a

game. So, you have shells and you have a let's say a ball under. You have three shells and you have a ball under one of them and you move the shells around and you have to guess where's the ball.

Well, in this case it's where is the silver.

Hello everyone and welcome to another edition of Triangle Investor Interviews.

I'm your host, Lucia Valkovich. And

before I announce my guest, just a quick reminder of a disclaimer. This interview

on and all my interviews are not a recommendation to buy or sell any shares, products, or services. Always do

your due diligence and consult with your financial advisor. Today, I am joined by

financial advisor. Today, I am joined by Peter Krauss, author of The Great Silver Bull and editor of the silver stock investor newsletter, the right man to talk the hottest commodity right now

that is silver. Peter, thank you very much for joining me today.

>> Lucen, it's always a pleasure speaking with you and I'm happy to be here once again.

>> Thank you very much. Just like I said, great time to be alive as silver investor. Silver has delivered and o

investor. Silver has delivered and o really impressive. I believe 140% gain

really impressive. I believe 140% gain in 2025 pushing prices to beyond beyond 70 bucks. Today we have more than

$70 silver. What do you believe the

$70 silver. What do you believe the market is signaling with this explosive move? Genuine physical uh uh uh

move? Genuine physical uh uh uh tightness, a shift in investor sentiment toward precious metals as safe havens or something else. Give give me some color.

something else. Give give me some color.

Why do we have this silver price? So, u

I guess my answer would actually be yes to all of your points. Frankly, I think it's a combination of all of these things have kind of come together at the same time and uh because this is a

massive move uh even for silver which can do this um as we know from history but it is it is massive and uh this year alone you know as you said about 140%

return this is I think I want to caution people you know not something you should expect every year and um in fact if if we got that every year the bull would be over probably quite quickly and we don't

not that either but um as you said I think it's definitely a clear sign of physical tightness. we saw this start in

physical tightness. we saw this start in fact well you know you and I have talked about this before but I started signaling uh this issue back in uh early

2024 saying that um for me the reason one of or the main reason that the silver price was really seemed capped at maybe 28 $30 was because there were

these large secondary inventories produced silver just sitting above ground in bar form at the major futures exchanges like Shanghai LBMA ComX

And the big consumers were able to go and you know buy a long contract futures contract and stand for delivery take delivery of that silver when their contract matured. And because the silver

contract matured. And because the silver was already produced already sitting above ground sitting in inventory there this did not put pressure on the silver

price because miners didn't have to try to bring more to market. you didn't have to try to draw more silver out of uh

maybe private holdings of silver through a higher price. So, but I said that you know based on the decline that we saw a

significant decline from early 2021 up until let's say late 23 early 24 in these inventories that if at this pace it could only continue maybe 12 to 18

months. So I think what we saw starting

months. So I think what we saw starting about a year ago with the silver price really starting to rise. So the bottom let's say in recent uh years was about

2024 in February it was $22. has really

risen quite significantly since but really took on new life this year and at the end of last year I think be you know this combination of the market being

tight and then these this threat uncertainty around tariffs where especially in the US uh you know traders and so on were worried that if they had

to deliver silver to uh to contract holders that if that silver had to come from offshore that it may be taxed because of tariffs. So that would cost

them. So they wanted to get the silver

them. So they wanted to get the silver into the US before um potential tariffs.

So um you know that moving the silver around doesn't change the tightness, but it does reflect u you know I guess uh the the the need to to be nimble and to

react. And we were seeing big big

react. And we were seeing big big deliveries from those exchanges. So this

was going into um into uh you know sort of privately held warehouses. It was not shifting all from one exchange to the other. And then you know after at that

other. And then you know after at that point so let's say a year ago we were already into um the third year of massive central bank buying of of gold.

uh you know to the tune of nearly one out of every three ounces of gold uh that came from mining uh each year for the last three years went to central

banks. So they know they know something

banks. So they know they know something you you know you can't I would I often say do as they do not as they say and so they've been buying a lot of gold and we

know also from history and I talk about this in the book that silver uh outperforms gold over the longer term but in the shorter term it underperforms

and then eventually it catches up and then it surpasses and I think that uh you know people who have been following gold and see it at $4,000 three for

$45,000 now almost and staying at these sustained high prices are saying to themselves, "Wow, you know, maybe I need

exposure to gold, but $45,000 US for one little coin is a lot of money. So, what

are my alternatives?" And silver has always been that natural alternative.

So, it's yes, it's an inflation hedge the way gold is and it's, you know, affected by these other things that that I mentioned before. So, as I say, all of this has come together and produced quite the uh quite the bull market in

silver.

>> Excellent overview, Pete. Uh but given the parabolic nature of this rally, is is there a risk that silver has outrun it fund its fundamentals in the short

term? I mean, potentially setting up for

term? I mean, potentially setting up for a sharp correction.

>> So, I would say possibly yes. I I would not deny that possibility at all. Uh, in

fact, even through this summer and through the fall as it was going through 35,45 um and 50 ultimately in October, I I

personally felt like it was advancing too quickly. But, uh, the market, you

too quickly. But, uh, the market, you know, was right because we're at 70 now and that was 45. So, I'm assuming, you know, that was right. Um but uh I think

that it signified a lot of pent up demand that was on the sidelines cash people who were watching waiting and each time you had a small pullback it was being bought. It was being bought.

Same for gold. Small pullbacks just attracted more money and it was never really sort of allowed to fall very much. Then we got a correction in

much. Then we got a correction in October um little bit after it reached I think it was 54 or 55 was a meaningful correction uh dropped

to I believe it was uh high 40s and that's the lowest we've seen so far but I do agree with you that yes in fact I was just reading uh yesterday some

research that that suggests that um you know you you could there's different things you can look at one of them is the silver futures in the US and uh the

there's what we call smart money and um speculators with a with not to not say dumb money but speculators and um the uh the speculators are very long silver and

uh this is typically a sign that it has gotten somewhat overheated so yes I would say yes there is especially now at $70 this is also you know psychologically it's a milestone level

$70 is all the round numbers are are kind of a big deal to round and the fives 70, 65, 70, they're all kind of big deals and um but 70 is a big number

and uh especially given where it has been over the last couple of years and an again an all new a new all-time high record. Um I would say yes, there's

record. Um I would say yes, there's there's significant chance that we would get a correction. It could be it, you know, it could take any form. Um it

could be quick and uh and small. It

could be quick and deep. It could be um more drawn out. You could get a drop and then it moves sideways. Or it could even peak at 70 and move sideways and it could consolidate. People need to

could consolidate. People need to realize that you can get price corrections over time, not just not only in in the number. So, I'm not saying this will happen, but we've seen these

kinds of things happen before. Let's say

now potentially silver could let's say stay in a range around close to around 70 and maybe stay there for 2 months 3 months. It's not impossible. We have

months. It's not impossible. We have

seen these things happen before. But if

I had to go maybe with instinct, I would say that yes, I could easily see um a sharp correction. Uh we're near the year

sharp correction. Uh we're near the year end. Uh there's a lot of things going

end. Uh there's a lot of things going on. There's also a lot of people maybe

on. There's also a lot of people maybe not paying attention to the market.

makes it easier to push around. And so,

um, my my sort of best guess would be, uh, a small to medium correction. Uh,

not necessarily very long-term. I still

think there's a lot of pent-up demand waiting to go and and buy on corrections. Um, and then perhaps that

corrections. Um, and then perhaps that would last a matter of a few weeks, a month, and then we'd be back to climbing again. Hopefully, steadily climbing.

again. Hopefully, steadily climbing.

Yeah, our next interview will shown if you were right or wrong, but I agree with you by the way. Full disclaimer.

>> Uh, Pete, critics argue that silver price is heavily manipulated through futures markets. Given the record

futures markets. Given the record heights, do you believe we are witnessing a breakdown in traditional suppression mechanisms or this really is a moral function of a genuine physical

shortage?

>> So, um, again, I would have to say both.

I mean I do believe that yes um there's been and and for me at least you know any sort of uh suppression I feel happens can happen on a very shortterm

basis not on a longer term basis and you know when people ask me about that I always point to silver was $4 and change in 2001 and it went to $49 in 2011 10

years later so that's a 10 times return um so it was manipulated which way at that point you know Uh so but again I do believe in the short term this is

possible that it happens uh frankly for silver to now be well beyond its previous all-time 45 year high of $50

and um you know uh one of the things that I think for me suggests strongly that yes there is absolutely physical tightness it is the fact that we've

we've heard even from some of the more let's say mainstream more conservative um uh outlets that that report on these things. uh that in London physical uh

things. uh that in London physical uh tightness was very very uh there was very high physical tightness in London where most of the ETF silver is held and

uh so they were be it was becoming impossible for them to make deliveries um which doesn't look good for a futures exchange and so we also saw from

research that um inventories in China had reached 10-year lows and I believe those are perhaps all-time lows for them because their exchange hasn't been

around all that long. So, it's assumed that likely uh significant inventories were shifted from from Shanghai to

London. And I I compared this to what we

London. And I I compared this to what we call a shell game. So, you have shells and you have a let's say a ball under you have three shells and you have a ball under one of them and you move the shells around and you have to guess

where's the ball. Well, in this case, it's where is the silver? And moving it, no matter how much you move the shells around, there's still one ball. And no

matter how much you move the silver around, it doesn't mean you have more silver. You just change the location.

silver. You just change the location.

And I believe that's kind of what had been happening. So, it's it's a it's a

been happening. So, it's it's a it's a combination of those two. And uh you know, we've heard I think many uh contributors and and commentators say

things like um price discovery is moving east. And I and I believe that and and

east. And I and I believe that and and for the main reason that most of the consumption is east places like China and India are huge consumers of silver.

So I think it's normal and natural that what they pay for silver will ultimately determine a a world price for uh for the metal.

>> Yeah. Pete, how do this inventory drains compare to historic historical precedents such as 2021 silver squeeze attempts and could they uh for show a

delivery default or force short covering by bullion banks? So, it's funny because when I started my newsletter, it was actually January of 2021. And I remember

very well that silver squeeze, which was right at the end of of that January.

And I told my subscribers, I said, you know, this is not something that's fundamental. Um there's plenty of silver

fundamental. Um there's plenty of silver available and it's purely sentiment because you had these uh meme uh stocks

that were going crazy uh GameStop and so on and uh somebody I think it was on Reddit uh suggested that people should buy silver um to squeeze out silver

shorts. And so that's basically what

shorts. And so that's basically what took place. It was a phenomenal uh

took place. It was a phenomenal uh occurrence. It lasted a matter of a few

occurrence. It lasted a matter of a few weeks and I said, you know, let's not expect this to last because um there there's no basis really for it. It kind

it pretty much played out that way. I

think it's not the case this time. Uh we

do have shortages. We had surpluses on balance from I believe about um say 20 from what we see in silver uh institute

reports for 5 to 10 years prior to 2020 2021 we had surpluses. uh so we were consuming less silver than we were producing and these this this these

surpluses would end up in the futures exchanges in their inventories. Ever

since 2021 uh we are in structural deficits and this year will be the fourth fourth consecutive year um that and the silver sur silver the world

silver survey that's put out by the silver institute um forecasts that the next 5 years we will not only see ongoing structural deficits but we will

see new record high deficits simply because you know even if demand were to stay where it is or even frankly drop a

little bit. Um the uh the production is

little bit. Um the uh the production is not is not uh meeting demand by any stretch of the imagination. We had

maximum production of silver back in 2016. So 10 years ago was the the last

2016. So 10 years ago was the the last time silver production, mine production peaked. It was 900 million ounces. We

peaked. It was 900 million ounces. We

have not been able to we've averaged over the last uh 5 years we've averaged about 830 million ounces. So we're not even close. And uh the forecast is mine

even close. And uh the forecast is mine supply will stay flat. Maybe up 1% or so if you're lucky, you know, in a year or

two. Um but uh demand is not expected to

two. Um but uh demand is not expected to to drop significantly. And it's to the tune of 10 to 15% above supply. And so

uh that's why they expect these deficits to continue for several years. And uh we can go into all kinds of reasons why, you know, uh these deficits are likely to continue. Mining silver is very

to continue. Mining silver is very particular and and really actually different in many ways from other metals and that just makes it uh what what I call

supply inelastic to price. If the price of silver rises um you you do not have like in a typical economics 101 you know some there's a huge demand for some

product well the manufacturer will just go and make more and bring it to market and that will meet the demand and sort of you know help balance the price out.

This doesn't happen in silver. Um it's

very difficult to mine silver. Uh only

25% of mind silver comes from primary silver mines. 75% of mined silver comes

silver mines. 75% of mined silver comes as a byproduct of mining gold, copper, lead, and zinc. So these producers of

other metals, including silver, have little to no interest in trying to produce more silver if the price of silver goes up because the amount of silver they produce and its meaning to

their revenue stream is so small, they just are happy to accept a higher silver price for what they already produce. And

frankly, um, Luchan, you can you can get it even more, uh, exacerbated by, uh, some miners will say, well, this the

silver price is now $60 or $70. I have

the flexibility with my mine to go and produce silver from a lower grade area in my deposit. So I because the silver

price is so much higher I can now actually produce less silver less silver output every year and make the same profit because the because the silver

price is so high. So a higher price may mean even less silver coming to market in some case and of course therefore push the price even higher. So there's

all these factors to consider.

>> Yeah. I wanted to ask you about the sentiment. uh you talk with people with

sentiment. uh you talk with people with big guys with the retail etc. So do you believe that we are in euphoria when it

comes to silver or you would argue that actually the retail hasn't entered the silver silver market yet in a big way?

>> I would agree and uh I would argue the latter that there is you know the beginnings of interest. U I don't think we're anywhere near euphoria. Um, you

know, euphoria happens when you're uh you're out uh at a cocktail party and someone starts asking you which silver stocks you own, especially exploration stocks.

>> And um I can tell you nobody is talking to me about silver stocks at any parties. So I think we're probably a

parties. So I think we're probably a long way from that. They they even may most people have no idea even what the silver price is right now. So um I mean

it is it is starting. You know, I do hear the beginnings of it, but I believe we are a long way off from from that uh state.

>> Sure. I wanted to ask you about the mining companies. As a veteran analyst

mining companies. As a veteran analyst with expertise in mining stocks, how are silver producers responding to these elevated prices? Are we seeing increased

elevated prices? Are we seeing increased uh exploration or production ramps that could alleviate supply deficits?

So I don't see production uh helping to alleviate deficits. What I do see is

alleviate deficits. What I do see is there's more M&A. Um, I believe that you see these larger producers have the benefit now of a higher share price

which they can use as a currency and they go out and use their shares to buy smaller companies um who either have an economic deposit maybe already producers

themselves or you have uh you have so those are acquisitions you have mergers we've heard a lot more mergers and I have been hearing um a lot more from

from these smaller mining silver mining meaning CEOs that um their uh intention is actually to although they're on the exploration side and they have a you

know significant um market cap they have enough access to capital that they're uh there are several examples in fact I I'm not going to name names but uh these

companies have a intention or at least are looking to acquire producing assets they want to move towards um being in a position where they can produce cash

flow the cash flow helps helps them to um continue exploration without uh you know diluting shareholders and having to keep raising money and um it's the right

kind of environment for it. I mean

there's been huge amounts of capital raises just in the last four or five months it's been massive. Uh you know so I can tell you the previous years of the

previous three years um you know financings would stay open for months and months they would have a hard time filling them. Now they're spoken for

filling them. Now they're spoken for before anybody knows about them. It's a

complete flip. It's a complete flip. Uh

but I still feel that's that's still mostly smart money because this is speculative stuff. There's, you know, in

speculative stuff. There's, you know, in most cases um it's pretty speculative, but uh they're having no difficulty whatsoever raising money and um it's a very big change in the uh in the

sentiment from from the the minor side.

>> Yeah. Uh Pete, final question for retail investors inspired by the current rally.

What lessons from past silver bull markets uh the the 1980 Hunt brothers episode or 2011 peak would you emphasize to avoid common pitfalls such as

overleveraging uh or timing the top?

>> Yes, I would completely agree. Leverage

is very dangerous. um I don't recommend it and that's why um you know I don't participate in the futures uh on the future side of things. there are ways to do it and I'm not saying that it's uh

you know something that people should completely avoid but if you're going to do it um just be very conscious of the risks that it brings and in fact just very recently the exchange um believe

this was uh just a week or so ago ra will will raise can can raise the the minimum um on a on a contract just no warning at all they in fact do it like on a Friday night or something and then

you have to automatically meet have enough cash in your account to meet this higher margin. If you don't, you're

higher margin. If you don't, you're forced to sell and this pushes the silver price down. So, it may be in a loss position for for some people. So,

it it is it's very high leverage and and and quite risky. Um I think lessons have have taught us that uh and we're seeing it now. It's fun because it's mostly to

it now. It's fun because it's mostly to the upside. Um silver's volatile, so

the upside. Um silver's volatile, so that's pleasant. Um but it can be

that's pleasant. Um but it can be volatile to the downside. Um and I think that people need to consider that uh or at least I feel that silver has a place

in everybody's portfolio highest to lowest risk um you know investors it's a matter of degree how much exposure you have and it's a matter of the type of

exposure. So the least risk as your

exposure. So the least risk as your listeners would probably agree is the physical metal. Um you know and then

physical metal. Um you know and then maybe some silverbacked ETFs and from there you go into let's say uh diversified minor ETFs and then you have

royalty companies and then you have producers mid tiers and explorers for the highest risk. Um and again it's a matter of degree of exposure. Uh and you

again you need to feel comfortable with you don't have to take the biggest risk.

I talk in the book about how what today are the two two of at least the largest public silver companies. Wheaten

Precious Metals which is a massive royalty company and then you have uh Pan-American Silver which is one of the largest public uh silver producers and

at some point each of those two companies was up one of them I forget which in a span of about 5 years was up

16 times. the other in a span of two

16 times. the other in a span of two years was up 16 times. So you can get fantastic leverage in the biggest names um you know uh which which means that

it's not necessary to go to the the highest risk exploration companies um to have some some attractive returns. So

watch the volatility uh use it to your advantage. you see big pullbacks, uh

advantage. you see big pullbacks, uh it's not easy, but for me that's a sign that it may be a chance to either buy more or to get started buying, you know,

and again, people shouldn't feel it's all or nothing. I think that it's uh wise to do so in increments. And yes, if if things go a little bit against you

and the price continues to go up, you may end up paying an average price that's higher, but you've mitigated your risk because that price could have gone down. And if it had gone down then you

down. And if it had gone down then you would have uh averaged in at a lower price. So you you know you can't have it

price. So you you know you can't have it both ways but it is a way to to mitigate risk.

>> Yeah. Again good point Peter. My

apologies. This is my last question. I

will not ask you about your price silver price targets in 2026 2030 2035. However

I will ask you where do you see gold to silver ratio in 2026?

>> Oh that's a good question actually. Um

so right now the ratio is at about 64 and maybe even 63 with today's move. Uh

but somewhere around 64. I do think that um we will see silver higher. Um but I also think that we will see gold higher.

So I'm not sure we will see a very big move. Uh I think the move will be down

move. Uh I think the move will be down meaning silver will continue to gain against gold. Um, but if we're at 64

against gold. Um, but if we're at 64 now honestly I would say 55 maybe on the low side 50.

Um, but that could s that could signal considerably higher silver from today's price, you know, depending of course on what gold does.

>> But I again, it's been such a big move.

I don't think we'll see uh, you know, any kind of a similar move in the ratio over the next year. A lot of these gains have to now be digested by the market. I

think we will see that happen.

>> Yeah. Uh Peter, how can people reach out to you? How can they uh where where can

to you? How can they uh where where can they find your book?

>> So my book is available on Amazon. Um

it's uh the great silver bull and uh the whole idea behind the book was introduce people to the silver market, understand silver historically, understand silver

um you know its its place in an economy and in savings, how it's used, where it comes from and um how to invest in it through physical and through um mining

stocks and so on. And ultimately, I believe we will get to a point, you know, when is a good question, but we will get to a point like any other bull market when it'll be time to sell. And I

talk about how to look for signs for for that kind of uh those conditions in the book. Um besides,

book. Um besides, >> how can people reach out to you? What's

your website?

>> Uh yeah, my my newsletter is silverstockinvestor.com.

silverstockinvestor.com.

You'll uh find more information about the newsletter there. Um and uh you can find me I'm on X or link Twitter uh Peter Kraut. I'm on LinkedIn as well and

Peter Kraut. I'm on LinkedIn as well and I'm uh pretty active and uh you know we'll reach out to people and uh look forward to to connecting to uh your your viewers.

>> Peter, I want to thank you for this learning session as always. It was a brilliant one and I wish you a merry Christmas and a happy new year and looking forward to host you in 2026 again.

>> Thank you Lucen and uh merry Christmas.

Happy new year to you as well.