In a recent interview on Commodity Culture, Shawn Khunkhun, CEO of Dolly Varden Silver, shared his expectations for the precious metals market in light of escalating geopolitical tensions, particularly the trade war between the United States and China. Khunkhun, a well-regarded figure in the resource sector, laid out a compelling argument for silver potentially outperforming gold in this climate of uncertainty.
Silver: A Critical Metal in Uncertain Times
Khunkhun began by emphasizing the role of uncertainty in driving investment into hard assets like precious metals. He noted that in a “fractured world” facing numerous geopolitical risks, including the ongoing trade war, silver’s critical industrial applications could give it an edge over gold.
While gold is traditionally seen as a safe-haven asset, Khunkhun argued that silver’s uses in various industries—such as electronics, green technologies, and renewable energy—will create strong, consistent demand. The Silver Institute’s data supports this view, highlighting that a significant portion of silver’s demand stems from industrial use. Additionally, Khunkhun pointed out that there has been growing evidence of wealthy investors shifting from gold to silver, capitalizing on the historically high gold-to-silver ratio.
“Silver is critical,” Khunkhun said. “This bodes well for its future demand,” especially as industrial sectors are increasingly reliant on silver. Despite recent price dips, particularly following the trade war’s intensification, Khunkhun sees silver’s resilience and potential for growth as key factors.
The Need for a Catalyst to Spark Silver’s Outperformance
Khunkhun boldly predicted that silver could outperform gold, but he acknowledged the uncertainty around what might trigger this shift. “Do we need a rate cut? Do we need quantitative easing (QE)?” he pondered. These catalysts could accelerate silver’s rise, especially as investor interest shifts in response to changing economic conditions.
Gold’s Long-Term Appeal Amid Dollar Weakness
While Khunkhun is bullish on silver’s prospects, he did not dismiss gold’s enduring value. “For 5,000 years, gold has been a haven,” he reminded the audience. Gold has been a store of value throughout history, and it has performed exceptionally well, even setting new all-time highs during recent market downturns. Khunkhun highlighted the potential for a weaker U.S. dollar to further drive gold’s appeal, drawing a comparison to 2008 when gold’s price rose significantly as the dollar weakened.
Dolly Varden Silver’s Strategic Advances
Khunkhun also highlighted Dolly Varden Silver’s recent developments, particularly its listing on the NYSE American under the ticker symbol DVS. This milestone gives the company access to the U.S. investment market, marking a huge step in its growth strategy. Khunkhun explained that for the past five years, Dolly Varden had relied on a small pool of North American capital, but now, with the NYSE listing, the company is positioned to tap into a far larger market.
“We’ve never had more cash on treasury, we’ve never had more ounces in the ground, and we’re just about to embark on one of our largest exploration initiatives ever,” Khunkhun said, referring to Dolly Varden’s exploration programs that could serve as catalysts for the company’s growth. He expressed confidence that institutional investors, which have been underexposed to precious metal stocks, will soon rotate into the sector, potentially providing a significant boost to companies like Dolly Varden.
Looking Ahead: The Shift in Institutional Investment
Khunkhun touched on the current underownership of precious metals stocks by institutional investors, suggesting that when this sector rotation occurs, Dolly Varden will be well-positioned to capitalize on the shift. He pointed out that institutions often have specific criteria for investments, such as minimum share prices and trading volumes, which the NYSE listing could help fulfill.
“The big bet we at Dolly Varden are making is that when that shift occurs, it’s too late to then try to make that move. You have to be there before it happens,” Khunkhun asserted.
Conclusion
Shawn Khunkhun’s interview painted an optimistic picture for the precious metals market, especially silver. His view that silver could outperform gold hinges on its critical role in industrial applications and the potential for increased investment flows as investors seek alternative assets in times of geopolitical and economic uncertainty. Meanwhile, Dolly Varden Silver’s NYSE listing provides the company with increased visibility and access to capital, positioning it for growth as the precious metals landscape evolves. With strong fundamentals and strategic advancements, both silver and Dolly Varden could see significant upside in the coming years.
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