Dealer Reacts to JP Morgan Slashing Silver Price Forecast

So Harry, I recently read JPMorgan has lowered their forecast for silver. What do you make of that? I just question these predictions that are so low, because you're talking about a massive demand in the next several years that could only drive the price up. New to buying gold or silver, SD Bullion makes it simple with no order minimums, clear pricing and discreet shipping. Trusted by hundreds of thousands, SDBullion.com, where America buys physical gold and silver. Well, would you look at that? You guys are practically sold out of government ounces, Canadian maple leaves and the rest. Hardly any in the shop, Harry. Yeah, there's a reason for that, actually. One reason is things on the retail side have picked up somewhat in the last two weeks. So I think Alex and I can both say we're grateful for that. And also because I lowered the premium on government ounces other than eagles to match spars and silver rounds. So you can get a maple here in the shop, in the store for cash for the same price as a silver round. You know, the stuff was just sitting and it's now obviously almost gone. So I guess it was a good move for us and for the customers. So basically you could get a silver maple leaf for the same price as a silver buffalo round. Yeah. And an argument could be made, well, why not? They're both a full ounce. They're both very popular and beautiful designs. Silver eagles are an exception to that, of course, because they cost us more. I think for now we're going to keep doing it. What do you think, Alex? I think it makes them sell off the shelf and keeps the inventory rolling. And it keeps people happy because they can get a coin instead of a round. Yeah, yeah. Getting something government backed is always fun. And we buy a lot over the counter, of course, and therefore there's a lot of variety today being an exception, but we'll have, you know, five or six different governments represented in these shelves. And so if you want a Krugerrand, you want a kangaroo or something that you don't see every day, maybe something from Korea, we will have it currently anyway at the same price as silver rounds. Well, I think for me personally, you know, if I look in the case and I see, okay, we got some silver maple leaves here. We got the buffalo rounds. I'm probably going to go for the coin because it is backed by a sovereign nation. Yeah. And especially because Canada is our close neighbor and in prior videos, I've talked about how it's denominated $5 Canadian face value. It just makes sense if you have a choice to probably choose that one versus a buffalo. But I guess with the eagles only being $1 more, I might actually go for the eagles because these have always been one of my favorites. They're definitely one of the most liquid, one of the best things to buy if you live in America. Yeah, for sure. I mean, there's nothing more popular than an eagle, especially at a fair price. And I think, you know, even recently we were spot plus four on eagles, lowered that premium too. And all of it was to stimulate some retail sales that were really sluggish compared with what we were buying from people over the counter. So you mentioned retail sales are picking up. I know a few weeks ago we talked about it. It was, I think, 15% were buying, 85% were selling. What would you say now is sort of the ratio buying to selling? What do you think, Alex? You're up in the counter all day long. More or less. It's balancing out, but it's still not 50-50. So if I had to give a percentage, it would still be around 65 to 35. So there's still a high amount of purchases as compared to individuals selling to us across the counter. So to put it another way, about two thirds of the people coming into the shop are still wanting to sell to you guys. Yes, I would agree with that. And then what about silver versus gold, Harry? We do have a few gold eagles in the case, which is pretty rare. Usually I don't see any. Yeah, it's interesting here. The U.S. gold is just selling like crazy. I find that the two out of the three pieces you see there are half ounces. For whatever reason, I would say the half ounce is the worst seller of the U.S. coins. And it's not a bad seller. But if I had to rank them, you know, the ounces sell the best. Tenth ounces are popular and quarters because they're more affordable for those who can't afford an ounce. But something about the half ounce, I don't know, falls through the cracks in terms of popularity here anyway. Maybe it's an affordability thing. I mean, if you can't afford an ounce, half ounce is probably out of reach, too. Just not sure. For whatever reason, the half ounces just aren't quite as popular. And you guys do have some 20 franc gold coins here as well. And these are at spot. That's a pretty good deal, Bill. It's an incredible deal for something from the 1860s. This is Napoleon Bonaparte's grandnephew, came back to power after the restoration of the monarchy. Then he went back to an empire again for a while. His final leaving of power was after the Franco-Prussian War. These coins, these 20 francs, these are the same as what you would find with a Swiss 20 franc, an Italian 20 lira, a Belgian 20 franc. There was what was called the Latin Monetary Union, where they were kind of on a international gold standard of sorts in Western Europe. And so they're 0.1867 troy ounces each. So a little bit less than a fifth of an ounce, I guess. Yes. Do you think those are more popular in Europe just because they were there for a long period of time? Or we see a lot of them here in the States as well. I mean, yeah, it's a pretty popular coin internationally. Certainly any of the 20 francs from any of those countries, because it's a known quantity. It's kind of like their pre-33 gold, if you will. And these ones here from France, do you think these were minted at the Paris Mint? Do they have a mint mark or anything? Well, A, the A mint mark's going to be the Paris Mint. I didn't card all of them up. B is going to be, the double B is going to be Strasbourg. Would you include the sovereign in that pre-33 mindset, Bill? You know, the British sovereigns as in terms of popularity in Europe? Oh yeah, absolutely. But that's one that continued to be produced even after the gold standard ended because it was so popular, because it was so internationally recognized. And our own military at one point even put British sovereigns, gold sovereigns in pilot survival kits, just because any country in the world where you had to bail out at one point in the past, the sovereign would have been recognized. And similar to the pre-33 gold, these are 90% gold, 10% copper. Correct. I think that was just kind of the standard for a long time. And apparently the gold in Fort Knox is supposed to be melted down from coins like that. So it's supposed to be 90% gold. I don't know. If there's gold at all. Exactly. Hey, listen, I want to respond to some comments from the last few videos. People wondering where Adrian is and Richard. Adrian, Richard and Bill traveled to the show in Pittsburgh, the ANA show last week. And this week, Richard and Adrian are on their way as we speak to the Long Beach show. If any of you out there are attending the Long Beach, California show this week, we will actually have a table there under the name of Beach City Coins and it will be in the table number 723. So please come by and say hello to the guys if you happen to be going to that show. We'll miss them here. I'm actually, I'm sure Bill would like to be there, but I'm grateful that he's here this week. Believe me. So Harry, I recently read JP Morgan has lowered their forecast for silver. What do you make of that? You got to think they know something or maybe because they are usually looked at as being manipulators of the market. Maybe that's how they're going to manipulate it in a downward fashion. I just can't predict. No, it's interesting. We were having a nice conversation before the video rolled about the silver batteries being experimented with and how Mercedes Benz has experimented with them and getting ranges of 700 plus miles with a 15 minute charge. And you think of that technology coming online in the next few years and the demand for the silver that it's going to take to make those batteries. I just question these predictions that are so low because it's going to create a huge demand for silver, much more so than I would say solar panels. Even as popular as they're becoming, there's far more people driving cars than getting solar panels. Maybe short term the market's going to stay in a channel in the 60s, but if you're needing What was it? A kilo per car? That's right. Yeah. A kilo of silver per car. You're talking about a massive demand in the next several years that could only drive the price up. That's true. And the reason that J.P. Morgan lowered their forecast, which, by the way, went from $90 an ounce to $63 an ounce for Q4 2026 and then a similar forecast moving into next year. The reason they lowered it was because of solar panels and thrifting. They're estimating about 60 million less ounces are going to be used this year compared to what were forecast for solar panels specifically, and that's why they lowered their forecast. Can you explain for the audience what you mean by thrifting? Basically, these solar panel manufacturers are using less silver per solar panel, and the reason they're doing it is because the price of silver went too high. It was too expensive for them to keep producing these same panels. So just spreading it thinner, essentially. You have the same phenomenon with old computers. If you find like really old computer boards, there's a lot of gold on them. And just as technology progresses, engineers figure out ways to do the same with less. Got it. Yeah. Things get smaller. Yeah. So essentially it's a silver paste and it's just thinner and less silver in it. But ultimately, that probably is a good thing that the high price of silver forced them to figure this out. Well, here's the thing, though. If your subscribers watching are stackers for the most part, and if they're still eager to buy, then a prediction of a price being lower than it was going to be is really good news if you want to keep stacking. If you project out a few years, though, I think it could be a good investment now at this price if you think these batteries are going to drive demand through the roof. Well, not only the batteries, but also the AI data centers, Harry. They're using an incredible amount of silver in those. And those are projected to grow exponentially, more and more data centers across the nation because they're needed for AI to run. Well, it seems to me as we become more electronic dependent and we're all on our phones all day and our computers and our electric cars, it seems like long term, and I don't mean in a year, but long term, silver is going to be a really good buy, you know, in terms of an investment for the future. I'm very fascinated by this potential with the silver batteries, Alex. And in your estimation, when might they become more mainstream the way lithium ion batteries are now? Well, much like with every new invention, there's going to be an upfront premium cost. So that's going to be in the luxury products. So you can see Mercedes, some of the more supercars and just luxury brands having the silver batteries in. And it's going to take multiple years for that product to become mainstream enough and be produced enough to have a lower premium in which regular people could afford or at least consider purchasing those, that technology. And along those lines, do you foresee those kinds of batteries being used as we use batteries, you know, for our appliances and toys, do you think there will be silver in that type of battery eventually too? Yeah, as I mean, as technology advances, there's replacements come in waves. So we went from lead batteries, lead acid batteries to lithium ion batteries. And now the transfer, there was like an intermediate window where we were even testing sodium ion batteries. But now the silver solid state battery is looking like the move to the future. Does it explode when you put it in the dumpster? It does not actually explode when you put it in a dumpster. That's a big plus. Yeah, to have your car not explode when you get in a wreck is pretty nice. Yeah. You know, I got a comment on your when you mentioned the lead and acid batteries of the past. You guys are all too young to probably remember those. But as a kid, I remember many toys and more so flashlights being ruined. You put them away for the season and next summer you open your flashlights not working and the batteries had leaked all over the the wiring inside. I mean, that was a real problem back in, well, a long time ago anyway. Well, Harry, you are very perceptive. And actually, Samsung has already been testing these solid state silver batteries and things like watches and the like. So I think they are probably going to move into other products as well. It just makes sense. And I wonder, too, again, I'm not a scientist, but our lithium ion batteries, do they have any rare earth in them? Will the silver replacements alleviate our shortage of of rare earths in this country? I don't think lithium is a rare earth, but it but it can be hard to get at times. And especially, you know, what geographical location are you getting it from Chile? Are you getting it from China, that type of thing? But there are other rare earths, too, that I know are becoming a problem because China is now refusing to ship out some of that stuff. The lithium may not be a rare earth metal and rare at all. It is scarce, but as much as we have on this planet, we have a limited supply. So we only can mine so much before we have to start recycling and before the time of lithium has to be moved on to the next item because we used it. There's a use scarcity and the more we use it, the less we have. Yeah. And one thing with silver is it can be recyclable. But a lot of the silver that's used is so thin and such small amounts that it's not really cost effective to recycle it now. But if the price of silver goes up to, say, a thousand dollars an ounce, we could, in theory, recycle all of the silver that's been used. I do believe that recycling will be the key point of the future to prevent loss of assets and loss of materials around, because we've thrown out a lot of materials, not just silver, but just a lot of materials that could have been recycled over the last hundred years. I'm going to venture ever so slightly into political commentary, which usually gets me beat up in the comments section. But, you know, you mentioned Silver Dragons, you know, some of the metals and rare earths that we use come from China. I think we really ought to take a hard look at whatever we get from China and try to get it produced in our country, because they're not a friend, they're an adversary. I don't want to use the word enemy because thankfully there's no no heat between us right now. But in a pinch, you really want to rely on an adversary for a critical element. There's a book I read called The War Below. It talks about a lot of these projects. The problem is that a lot of these rare earths that we do have in the United States are on places like nature preserves, national forests, like things that are sensitive. There are advocates of people that don't want those lands disturbed. And so it's a very complicated process of getting that stuff developed. I understand, too. I understand the need to preserve beautiful and fragile environments in our country. But you have to look at this from almost a defensive position, almost a military position, where you may have to sacrifice some of that beauty and natural resource, if you will, to harvest what we have here so that we're not dependent on an adversary. Let's just say, God forbid, we got into into a hot battle with an enemy, with an adversary. Do you think they're going to ship us a strategic metal or element? I don't think so. You make a really good point. It is national defense. We need to have things like neodymium, praseodymium. These things come from China. We need them in our weapons systems. And so how can we even defend this land if we don't have them? So what good is a natural resource if it gets taken over? Interestingly enough, this ties back to a video we made maybe a year and a half ago about the strategic stockpile. And silver used to be part of the strategic stockpile. We mine enough in North America now that it no longer needs to be stockpiled by the government, per se. But in that strategic stockpile were a lot of these rare earth metals. Over time, they either used those or sold them off and said, well, you know, the Cold War is over. Why would we need to spend money warehousing these rare metals? But we've kind of come full circle and they want to start doing that again. I think we are going to get back to that with Project Vault that Trump has already put out there. He wants to stockpile these metals. And in fact, silver is now on the list for critical minerals. So it's not impossible that the government would start stockpiling silver once again. Yeah, well, I mean, we have a strategic petroleum reserve. And so it's the kind of the precedent is there. We also stockpiled these metals in the past. And, you know, we're blessed in North America that we have access, immediate access to a lot of resources. But there's some we don't. And we'd be prudent to maybe put some of those away at a warehouse somewhere. I think actually along along the same line of thinking there, Bill, is I find it shameful that our pharmaceutical companies have farmed out antibiotics to everywhere but our country. I mean, antibiotics are so basic to the country's health, particularly in certain kinds of epidemics where are we going to rely on adversaries for our medicine, too? It just really is shocking to me. Yeah, that stuff should be made in America. Absolutely. Harry, do you think that the government will start stockpiling silver once again now that it is a critical mineral? To Bill's point, I think it is. And I think it will be stockpiled because especially if what Alex was talking about is the adoption of the silver batteries become a true need in our country, we're going to have to stockpile silver and the rare earth elements to keep these being produced here. And if you think about like drones and things of that nature, they would probably use a similar battery. I would think so. I would think that technology would require a lot of silver. If you could go twice as far as the other batteries, it would be necessary, I would think. So carry that thought again to a war scenario where our adversaries are supplying us with silver so that we could make drones to attack them. That's not going to happen. Exactly. We've got to have those resources being produced here. And that is just one more demand for silver, right? If the government does decide to start stockpiling it again. Yeah. So all these things combined in the long term and maybe not that long of a term, upward pressure on the pricing of silver because there's going to be far more demand for it. So JP Morgan reducing their forecast by 50 percent. You don't think long term it's going to really matter at all? I mean, it's going to matter for this year. I think they'll just adjust it upward when they're forced to by demand. One thing that I think is a wild card there is that obviously JP Morgan's making their prediction. It seems like mostly based on industrial supply and demand, the fundamentals. Exactly. Which, of course, is rational in a rational market. But if we continue to have all this geopolitical risk and gold goes way higher, a lot of people are going to just reflexively buy silver either because they can't afford gold or because they see gold moving up and they think silver is going to follow it. You know, there's always scenarios in where the investor demand can drive silver higher, even if the industrials don't. All right, Harry. Well, as always, it was great to see you. And we'll have to do another video next week. Thank you, Silver Dragons. And hopefully we can have Adrian here next week with Richard and joining us to tell us how the show was in Long Beach. I look forward to it. Thank you.