Mining CEO Claims Growing Silver Deficit, Urges Institutions to Drive Prices Up
Keith Neumeyer, the CEO of First Majestic Silver, a mining company based in Canada, has expressed concerns over the silver production deficit in today’s precious metals markets. While retail investors have shown interest in silver, Neumeyer believes that institutions need to enter the market to support the extractive companies necessary for various industrial purposes.
Silver prices have been attracting the attention of retail investors following the recent rise in gold prices. Neumeyer believes that the current state of the silver market is indicative of a price that should be around $70 per ounce. In an interview, he pointed out that there is a significant deficit looming over the silver market, estimated to be about 240 million ounces. This deficit could potentially lead to a supply shortage.
Neumeyer stated, “The mining sector only produces 850 million ounces a year. You’re in a 240 million deficit. No wonder why we have a $30 silver, it probably should be $50, $60, or $70.”
Neumeyer identifies two reasons behind the relatively low price of silver. Firstly, he believes that price manipulation by traders, who view silver and other commodities as mere numbers on a screen, plays a significant role. These traders often consider breakouts as sell or purchase signals without considering the intrinsic value of silver as an industrial commodity.
Secondly, Neumeyer points out the lack of institutional interest and investment in silver. Retail investors are actively participating in the market and selling a significant amount of metal to them. However, the absence of big institutions who should support the sector for extractive purposes is concerning.
Neumeyer emphasized, “These big institutions should be supporting this sector for extractive purposes because we need these metals. Yet they’re void, they’re not in this market at all.”
Other analysts have also predicted an upcoming increase in silver prices. Peter Schiff recently stated that $50 could soon become the floor for silver prices, emphasizing the metal’s strong performance and speculating that it could go even higher.