Precious Metals Mining Profits Set to Rise by HUNDREDS of Percent — Analyst Forecasts Are Obsolete

Hello dear friends. My name is Clive

Thompson. Today we're going to be

looking at gold, silver, and gold and

silver miners. And I'll be naming the

companies that I would be buying today.

But first of all, a risk warning.

There's nothing in this video which is

meant to be investment advice. I'm not

your investment advisor and I know

nothing about your situation. Please

always consult with an investment

adviser who understands your personal

situation and who can take into account

your risk tolerance.

Where are we now? Well, we've just

passed the last day of February, the

last working day of the FE of February,

and it was a Friday, normally a

smackdown Friday, and that would have

been the perfect day for the shorts to

smack the price down, but the price of

gold and silver rose this Friday,

unusually. So, basically, the shorts

failed to outwit the longs as they often

do at the end of the month or on a

Friday.

Gold has now established itself above

$5,000. Well above, it's a couple of

hundred above that now. And I think this

$5,000 and higher is the new norm. And

silver looks like it's established

itself above $50.

Um, so I think this is not this wasn't a

fleeting move as we moved above these

levels. It looks like it's going to be

permanent. I I think that these are the

new lower levels and they're holding.

So for years, the conversation regarding

gold or silver was about the rising

prices of everything, retail prices,

consumer prices. It was about the

shrinking purchasing power and how you

could stay ahead of inflation.

But that discussion has now evolved.

The discussion is no longer just about

inflation.

It's about confidence.

Confidence in currencies,

confidence in debt, or rather government

debt, and confidence in the system

itself.

We have moved from a world where people

were simply trying to keep pace with

inflation

to a new one where people are starting

to prepare for the potential failure of

the monetary system itself.

So the focus has involved evolved from

managing inflationary pressures

to confronting the broader risk of

systematic monetary failure

and I think that could come at some

point in the next 10 to 20 years and

probably a lot sooner than that.

So the conversation is no longer about

staying ahead of inflation. It's about

positioning yourself and myself for a

world that might emerge after the

current monetary system reaches its

limits.

And as I said, I think we're very close

to that limit now. We're at 5 minutes to

midnight.

First, let's look at why precious metals

endure these types of events.

Gold and silver have always been money.

Empires have risen and fallen.

Currencies have been printed, debased,

devalued, destroyed.

Yet, precious metals have endured.

They've survived kingdoms, wars,

revolutions, political upheaval, natural

disasters, inflation, hyperinflation,

invasions, confiscation, seizure, and

taxation. Somehow those who could hang

on to their gold came out the other side

as well, if not in many cases much

better off, than they were before the

situation arose. These people, these

smart cookies who had gold and silver

did not depend on trust in a government.

They didn't have to rely on the promise

of some central bank. They're both

scarce,

tangible,

and of course, universally recognized.

And I can promise you if we go into some

sort of currency chaos, everybody's

going to learn very, very fast. People

will wise up extremely fast what the

value of an ounce of gold is or an ounce

of silver.

But something else is happening. It's

not just the prudent individuals like

you, my viewers, and myself who are

seeking to protect our wealth with

precious metals.

Central banks both large and small are

increasing the gold in their reserves.

At the same time, they are very quietly

reducing their exposure to the US dollar

with American debt climbing higher and

higher and higher relative to GDP. It's

the debt is growing much faster than the

growth in the economy or much faster

than the growth in the gross domestic

product.

The monetary authorities around the

world are now preparing for a future in

which the dollar may not be the

unquestioned reserve currency.

We don't have panic yet, at least not

now. But they are positioning themselves

and prudent individuals like you, my

viewers, are also doing the same.

Now, gold and silver are quite

different.

Gold has the advantage of portability.

It concentrates a great deal of wealth

into a very small discrete form.

In times of war or crisis, those who are

forced to flee are far more likely to

carry a handful of gold coins than they

will lug a suitcase full of silver

coins.

When mobility matters,

when you've got to go somewhere in a

hurry and hide it, gold offers density,

discretion, and convenience.

Silver, however, plays a different role.

In a world where the monetary system is

faltering and everyday transactions

return to some sort of tangible

exchange,

silver is far better suited than gold

for that purpose.

Its lower unit value makes it practical

for day-to-day trade, for swapping for

food or fuel or services or commerce.

And it doesn't require the division that

gold would require because gold is a

much larger store of wealth.

So gold preserves its value across

borders and through upheaval and silver

facilitates the exchange within your

community when the trust in the currency

weakens.

Both serve different purposes,

but together they're a complete monetary

hedge.

That's why I think everybody should have

at least some gold and at least some

physical silver stored in a safe place

where you can easily get your hands on

it in a hurry if you need to.

Now, we're going to look at the silver

deficit quickly and we'll see that the

silver deficit is getting bigger. Let me

bring that up for you.

So what you're looking at here on the

screen is I've I've done it every two

years just to make it simple with the

estimate for 2026.

We've got the mind supply of silver

which has been falling. Now the mine

supply is falling um because

the easy silver has been found and most

of the silver which is being mined is

being mined as a byproduct of another

metal copper, lead, tin, zinc, zinc,

nickel, those sort of things. So unless

the demand for those other metals goes

up dramatically, the supply of silver

isn't going to rise very much.

Um the industrial demand on the other

hand has been rising at just at the same

time as the mine production has been

falling. So the silver coming out of

mines has been going down as you can see

on this chart from 2016 to 2026 it's

gone from 900

tons down to now about 819 tons. That's

just an estimate for the current year

but a significant reduction in mine

silver. At the same time, industrial

demand or industrial demand for silver

rather what people are using has gone up

from 780 million uh tons to this year

2026 an estimated 1,021

tons. So silver consumption has risen

and it's currently standing well above

the mine supply. Now some of the there's

also some silver going into physical

coins and bars. That's the central

banks, the governments of this world who

choose to print commemorative coins or

mint bars for collector purposes. These

are the things you buy in your when you

go to a coin shop uh or to your local

mint to buy uh commemorative silver or

gold coins or sometimes coins of the

realm. Um so that's been a fairly steady

amount of roughly 200 million uh sorry

not 200 million 220 tons going into mind

uh going into silver coins every year.

But the demand excluding the co what's

going to coins but risen from 780

tons to 1,021

tons this year and that demand is

increasing because it's going into solar

panels. There's more and more of those.

uh electronics industry. Uh and we are

definitely consuming more electronics

than we ever consumed before. And that

of course does include data centers

where uh the more microscopic the

connection connector becomes, the more

essential it becomes to use a perfect

electrical transmitter which won't rust

or corrode and silver is a very rare

metal which does that job. Then we've

got the automotive industry and lastly

the defense industry. All of whom are

seemingly consuming more silver than

ever before.

And we also know that virtually 100% of

all the silver produced each year is

consumed.

So there is no doubt that a short

squeeze is underway.

We've seen in the last few years this

deficit of silver uh which has been met

by the above ground stocks of silver,

recycled silver, by uh people selling

back their silver. Um silver's come out

of the woodwork to meet that demand. But

of course that's caused the price to go

higher because to get that silver, the

silver which is needed by industry, you

have to bid up. So someone says, "Oh, I

like the price." and they go down to the

coin shop or they go down to the um uh

smelter with their candlesticks and try

and get some extra money for them.

So, in my view, there's a short squeeze

underway. Um let's look at the

inventories around the world.

Shanghai silver.

That's down to just 306 tons as of the

27th of February this year. To put this

in perspective, in January 2021, the

figure was over 3,000 tons, 10 times as

much. Or another way of looking at it,

90% of the 90% of the silver held in the

Shanghai Exchange has now gone.

If we look at the LBMA,

the amount of silver in the LBMA,

although it's been rising in the last

few months, it is still only half what

it was in 2021.

And last but not least, the inventory in

Comx is literally falling off the edge

of a cliff. So the gold to silver ratio,

which was about 100 to1 a month or two

ago, um still about 60 to1 or 57 to1,

something like that. uh looks like it's

on its way to perhaps 10 to1. I don't

know where it'll end up. Um but the gold

to silver ratio um looks like it's going

to get better. Now what does that mean?

It means that silver should perform

faster than gold and a at a better pace

than gold.

But something else is going on in the

world and that's India.

Now for those of you who don't know,

India has passed a new law

whereby Indian equity funds

will be allowed to invest up to 20%

of their assets into gold and silver.

Previously that allocation was

restricted to investments like real

estate investment trusts and uh and

investment trust generally. So 20%

of assets in equity funds could now find

their way

as well as general funds could now find

their way into gold and silver. And we

know that the Indians love gold and

silver.

Also they passed a law saying that

lifestyle trusts um can invest up to 10%

in gold and silver. Now lifestyle trusts

are the kind of trusts where they modify

the asset allocation of the um fund as

you get older

and we all know Indians love gold and

silver. So this will open the floodgates

when it becomes law on the 1st of April.

In another modification um India has

announced that it will the the funds no

longer have to rely on LBMA pricing. Uh

now we all know that the LBMA price is

fixed.

It doesn't reflect the free market

price. If you go to buy coins in a coin

shop or on the stock market or somewhere

else like that, it'll be different.

So in future, Indian funds are going to

have to take the free market prices from

recognized Indian stock exchanges

and the LBMA price which was fixed is

becoming less important. And who fixed

the LBMA price? Well, it's City Bank,

Goldman Sachs, HSBC, JP Morgan, Chase,

uh, JP Morgan, Chase, and of course,

Morgan Stanley. So, all these banks get

together a couple of times a day and

discuss what the silver price should be.

They put in their bids and asks, and

they arrive at a a generalized level.

The smart money is starting to move out

of US equities. We've seen a few

examples of that where some systematic

and quant funds have even taken their

equity exposure down to zero. One or two

perhaps even negative and they're

rotating into defensive assets. Some of

which include treasury bales and bonds

of course but some are moving into gold.

Now this is a very very early sign.

These are the these are the smart boys

who've got a lot of money. Um, it's not

really moving the market yet. Um, but

this money is not reacting to the

headlines. It's more starting what will

be a structural change to have more gold

and silver in the portfolios.

The question isn't whether inflation

will be three or 6%. The question is

what happens if confidence breaks? And

if confidence breaks, what assets will

survive?

Now I'm going to let you know what will

happen if a small amount of money moves

into gold. So all the above ground or

above ground gold in the world is worth

about $16 trillion

and most of that gold is owned by

central banks.

Gold ETFs represent just half a

trillion. That's 132nd of the amount

owned by central banks. And silver ETFs

are worth even less than that. It's a

tenth of that.

And the gold mining sector, now we're

talking about companies. And the silver

mining sector, if we take all the gold

mining companies and put them together,

they're valued at 7 to8 700 to800

billion.

That number is a fraction of any one of

the top 20 companies in the world. For

example, um

Nvidia is worth more than 3 million,

sorry, $3 trillion.

And the value of the gold mining sector

is just a fraction of that.

And if you take all the silver miners in

the world and the silver ETFs, you get a

figure which is less than onetenth the

size of a medium-sized

US tech firm. So just an ordinary US

tech firm halfway up the scale. Take

that, it would buy the entire

silver mining sector.

So here's the key number. If just

onetenth of 1%

of the global bond market were to flow

into precious metals manages to put more

money to gold or silver which I think is

coming. It just takes time. Uh it will

be it will have a very explosive price

movement for gold and silver.

Almost nobody is positioned for a rally

in gold.

But now we're going to talk about a more

leverage play. And I did tell you I'll

tell you about mining companies that I

like. And I'm going to do that now. Um

because I think we're going to see a

tectonic shift by investment managers.

Gold and silver are about to become

mainstream investments.

Some macro funds are already running

ahead of the game, taking their equity

position to zero.

So, it's only a matter of time before in

the average investment manager will want

to hold gold and silver. And if they

want metals, they're bound to want the

miners, too.

So, it will only take a tiny shift in

behavior to have a huge impact.

Metal which was unattractive to mine at

$2,000 for gold or $20 for silver

is suddenly looking very attractive at

$5,000 for gold or $50 for silver. So

just consider this. If the cost of

digging up an ounce of gold is, let's

say, $30. If the price of gold goes from

$30 or from $20 to $50, which is what's

happened and your cost of gold was $30,

it was at $30. That gold in the ground

was just dirt. It was worthless. But

when silver is $50, now you've got $20

of profit to dig it up. So that gold is

worth an awful lot more. So the gold

reserves of gold mining companies will

be uh I'm talking about silver, sorry.

the silver reserves or the go of the

silver mining companies will be rising

just as the gold mining reserves be

rising on the back of the gold price. So

gold which was previously in the ground

and worthless because the cost of

digging it up would have exceeded the uh

the what you could sell it for. That's

all changed. Now you can dig it up for

less than it's worth because the s gold

price has risen from $2,000 to 5,000.

the silver price has risen from $20 to

over $50. Now we're nearly we're well

actually I think we're 90. Yeah, we're

at $90 now. Um so these companies are

going to be incredibly profitable in the

quarters which follow. So going forward

for the next 12 months, I think we're

going to see quarteron quarter of rising

prices. So think about it like this. In

Q3, which is the last reported quarter,

the average gold mining company was

selling its gold for $3,148.

Gold is now $2,000 higher than that.

And in Q3, the average silver mining

company was selling it silver for around

$38.93.

And silver is now over $50 higher than

that. We're at

$880.

So, we're not talking about a 100%

increase in profits. We're talking about

hundreds of percent. And by the time the

current prices work their way through to

realized selling prices, and that will

take time, and it won't fully appear in

the first quarter, it will start to

appear in the second quarter, I think,

i.e. the the results being reported in

July, August, September.

At that point, we're going to see

massively higher profits for many, many

companies.

And depending on which companies you

buy, some of your companies could become

10, 20, or even 40 baggers. That means

you make might make as much as 40 times

your money if you pick the right one.

But just a word of caution, we need to

be cautious about miners with operations

in Mexico after what's happened to

Vizler Silver. So be aware of that. But

if your exposure to to Mexico is quite

small, you don't have to worry because

if there's a problem in Mexico,

you will do extremely well on everything

else. If there's no problem in Mexico,

you'll do extremely well with your

Mexican silver miners anyway.

And now I'm going to talk to you about

screening for metals stocks. and I'm

going to tell you which stocks I would

choose at the moment.

So, now we're going to look at my

favorite list of gold and silver mining

companies and see which ones I would buy

at the moment. And remember, nothing

that I'm saying is investment advice.

So, these are not recommendations. It's

just a collection of companies which

meet certain criteria.

And the way we're going to look at that,

we're going to go to the program Simply

Wall Street, which you can uh download

from the link below this uh this uh

video if you want. It's completely free

of charge. No credit card is needed to

do what I'm doing. Um but if you want to

go for the unlimited version, uh the

link, if you've clicked on the link to

get the free version and then you want

to upgrade to the unlimited version, um

it will allow you to do so with a large

discount. I think it's 30% uh discount.

Um and of course uh you don't have to

upgrade at all if you don't want to. The

there are some limitations on the free

version. For example, you're only

allowed one portfolio of stocks with 10

stocks in it. Um but you can see the

website to see uh what the differences

are. Uh but if you do upgrade, it's

going to cost you less than a cup of

coffee a week. Um, so to find the mining

stocks that I would buy now, and this is

just a generality, first of all, I'm

going to go to industries and look up

um, gold and silver. So, we'll do gold.

There's gold. And I'll click on the gold

mining companies. Done. And I'll also

actually I just want silver as well,

don't I? So, I'll click silver. S I L.

There we are. So, we've now chosen gold

and silver mining companies. And we

already have a list starting to appear

here. Um, but I want just for the

purpose of this exercise, I want to

choose large companies. So, I'm going to

click here and go down to market cap and

I'm going to choose only companies which

are over $2 billion. Now, you can choose

a different size company if you want.

Um, smaller companies probably give you

a lot more upside, but they're also much

riskier. Uh, so now I've got a 87

results. It's far too many companies to

look at. Um, but I want really healthy

companies. So, I'm going to pull that

health band out here. Um, and I also

want to have companies which have got a

great future prospect. I high growth.

And last but not least, I don't want to

pay too much. So, I'm going to pull out

the value uh band and see what we get.

Here we are. Now, I'm not going to name

all these companies. Let's just go a bit

further and get a bit more value here.

There we I've got about 19 companies

which are good value, great future, and

very healthy. Uh you I'm scrolling

through them so you can see them, but

you can do what I just did. You saw it

just took me a few seconds with Simply

Wall Street link below this video. And

um I'm not going to go name all these

companies, but I can tell you that I do

own some of these companies and I think

I will buy some more, which I won't name

them because maybe a little bit more

research is needed. you need to go and

check where these companies are. Do they

have mines in Mexico, which might be a

problem? Um, is there any recent news?

You can look at that up and see. But

broadly speaking, I don't think you'll

go wrong with these companies. Across

the board, these companies are likely to

announce much higher profits in Q4 and

even higher profits in uh the first

quarter of 2026. Uh when that happens,

the analysts who analyze these companies

will be putting their new price

forecasts for the future. Remember the

analysts only look at the company when

they bring out the results. So the last

time they looked at the results was when

they had the third quarter results,

which would have been midocctober. So

the analysts would have based everything

they knew based on the price forecast at

that date. Then they'll have gone and

looked at lots of other companies

unrelated. And now they're going to have

the results for the full year. Those

will be announced uh probably in

February. Well, we're at the end of

February toward probably some in March

and maybe a bit in April. And as those

results get announced, you will see much

higher profits for most of these

companies, if not all of them. And if

you see much higher profits, expect the

analyst forecast to be increased. And

then we've got uh the March results

which will be even better almost

certainly because we've got a higher

price in the first quarter than we had

in the last quarter of last year. And

that means the analysts will upgrade

their prices again. So I think we're

going to have multiple price increases

and of course I think we got a good

headwind with the gold and silver price

looking very strong. Um so ladies and

gentlemen um my name is Clive Thompson.

Thank you very much for watching this

video. Thank you very much for

listening. Uh if you like and subscribe,

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