(Kitco News) - Silver's dramatic rally this past month was inevitable; however, according to one silver mining executive, if the market is going to attract long-term value investors, prices need to stabilize at these higher levels.
In a recent interview with Kitco News, Morgan Lekstrom, president and CEO of Silver Hammer Mining, said that he sees silver prices moving higher, but he added that ultimately the best scenario would be for prices to stabilize in a range between $23 and $25 an ounce.
The bullish outlook comes as silver prices stabilize around $21.50 an ounce. Silver prices are up more than 19% from the lows seen last month.
"I don't think we necessarily need to see higher prices before investors start to jump in," he said. "What the market needs is stability. The last thing we need is for prices to shoot to $25 and then, three weeks later, fall back to $20. It's this price action that makes investors nervous."
Although Lekstrom is fairly bullish on silver, he added that prices in the near term will remain sensitive to the U.S. dollar, which is being driven by the Federal Reserve's aggressive monetary policy stance.
However, looking past short-term fluctuations, Lekstrom said that it is only a matter of time before investors start recognizing silver's long-term value as demand continues to outstrip supply.
Silver Hammer is currently developing multiple silver projects in Idaho and Nevada, and Lekstrom said that with so few silver projects around the world moving forward, he expects supply to be a major issue within the precious metals market.
"This green energy transformation is not a passing fad," he said. "The demand for green energy is only going to continue to grow. The world will never meet that demand without silver."
While rising prices are helping to shift investor sentiment in the silver market, Lekstrom said that there are things the sector itself needs to do to bring in much-needed investor capital.
He added that mining executives need to do a better job explaining the importance of silver within the global infrastructure.
"It's more than just energy. If consumers want iPhones, and electric cars, they will need more silver. We need to tell that story," he said. "We can't just sit back and rely on faith that investors will return to the market."
