Oculus Research

Jim Rickards shares his latest prediction on the precious metals market, outlining why he believes gold and silver could still have significant upside ahead. He is calling for gold to hit $10,000 and silver $200 by the end of 2026.

If you want to be bearish on silver, you point out that the 1-month London silver lease rate has fallen over the past 20 days. If you want to be bullish, you point out that the historical average lease rate was around 0.0%, and that the lease rate is still far above normal. If you want to be bearish, you point to the downtrend in shares outstanding of ETFs backed by physical silver. If you are bullish, you point out how unusual it is that contango is getting smaller after a silver crash instead of larger. If you want to be bearish, you say rate expectations are rising faster than inflation expectations, which means real yields for the next two years are going up. If you are bullish, the most important point may be that the 1-year silver swap minus rates is still a few percentage points negative, when it should be positive.

We have been huge silver bulls since 2009, but be very careful here: lots of financial engineering going on. Jane Street not only added a record 20.6MM shares of SLV in Q4, it is now also the biggest holder of SLV

The recent rally in precious metals does have implications for the broader market. In 2007, Gold appreciated by 50%, warning the market… few listened. When the market acknowledged reality, it was too late. The crash took many by surprise… even holders of precious metals..