David Morgan stopped by the Gold Silver Pros show to discuss his thoughts on the mint shortages, Basel 3’s impact on gold and silver, and the tipping point for the silver market.
David believes, based upon conversations with those with knowledge, that Basel 3 requirements on gold, via the NSFR, will not substantially affect the London gold market. He believes that the new Basel requirements will raise costs and perhaps cause some of the participants to scale back their participation. However, he does not think it will have a measurable affect on the overall gold market trading.
He also believes that while the mints are short the metals (see our expose on the Perth Mint), that there is silver to be had on the market at a high enough price. We agree with him that price has to rise for that silver to come out of storage, and that is rally bullish for the price of silver in 2021. Lastly, we talked to David about the tipping point for silver. His view is that when investment demand gets high enough, we will see prices rise to reflect that additional demand. Right now silver is in an abundant supply situation, but both industrial and investment demand are expected to increase.