Gold looks good but investors should be overweight silver - analyst
(Kitco News) - While gold will continue to attract investors’ attention as economic uncertainty dominates financial markets, one research analyst says that silver needs to be the metal to watch.
A broad-based rally in precious metals markets Tuesday pushed silver prices back above $18 an ounce. Although gold captured most of the headlines as prices pushed above $1,600 an ounce, silver ’s move outpaced the yellow metal by more than a percent. The grey metal continues to hold on to most of Tuesday ’s gains with March silver futures last traded at $18.28 an ounce, up 0.74% on the day.
Lior Gantz, founder of the Wealth Research Group, said in an interview with Kitco News last month that silver ’s ability to outperform gold is the reason why investors should pay attention to the precious metal. Gantz added that he expects both gold and silver to rally in 2020 as inflation could pick up for the first time in more than a decade as central banks around the world continue to flood markets with liquidity.
“We are already seeing investors start to anticipate higher inflation and buy gold in the first quarter before the data is really out,” he said. “When inflation does pick up in the second and third quarter that is when we will really see the buying increase.”
Higher inflation, Gantz said is expected to push gold prices to $1,650 an ounce; however, he added that it's silver that is the real inflation hedge and that is the metal to watch.
“I can see silver really catching up to gold in 2020,” he said. “There is no geopolitical premium in silver; it is the true inflation gauge in the marketplace.”
Gantz added that in a pair trade between gold and silver, investors should be more overweight silver, compared to the yellow metal. He added that he sees silver prices pushing to $20 an ounce in 2020.
In the current environment, Gantz said that he like the idea of buying silver options or investors should look at the best silver miners in the marketplace.
He added that the silver miner he likes the best is Fist Majestic Silver. The senior silver producer is currently a client of Gantz ’s Investor Relations company.
“Bar none, the best company in the silver space is First Majestic,” he said. “ [CEO Keith Neumeyer really believes in the mines that he owns. Nobody knows as much about silver mining as he does.”
Wednesday, First Majestic reported record silver equivalent production 25.6 million ounces in 2019. The company also said that it generated a record $140 million of cash from operating activities.