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In this episode, Andrew Sleigh breaks down the latest developments impacting the silver price and gold price, including interest rate policy, inflation risks, and global financial instability.
Why Long-Term Investors Should Stay Focused on Gold and Silver Despite Recent Volatility
Gold and silver investors have experienced significant volatility over the past several months, leading many to question whether the precious metals bull market has lost momentum. During this Ask Andrew Podcast discussion, Andrew Sleigh explained why he believes the recent pullback should be viewed as a normal part of a much larger long-term trend rather than a reason for concern. While acknowledging that newer investors who entered the market near recent highs may feel disappointed by short-term price action, he emphasized that long-term holders remain in a strong position. According to Sleigh, perspective is critical when evaluating the performance of silver. Investors who purchased physical silver only a few months ago have experienced a difficult period as prices retraced after a strong rally, but those who accumulated over previous years remain well ahead. As he explained, "For all of us that have been holding prior to January, most of us aren't under any water." He noted that the recent correction has primarily affected investors who entered during the sharp advance near the beginning of the year. Looking beyond that short-term window, he believes silver continues to perform exactly as expected within a healthy bull market. Rather than viewing the consolidation negatively, Sleigh described it as a necessary accumulation phase that allows the market to establish a stronger foundation before another move higher. He pointed out that only a few years ago investors would have celebrated current silver prices, illustrating how quickly expectations can change after rapid price appreciation. In his view, today's price levels represent the base from which the next significant advance may develop. While temporary pullbacks create frustration, he argued they should not distract investors from the much larger long-term opportunity. Investors who focus on physical ownership instead of daily price movements are better positioned to benefit from future gains while avoiding the emotional challenges associated with short-term market volatility.
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Why Andrew Sleigh Believes Physical Precious Metals Remain the Best Long-Term Investment
Throughout the discussion, Andrew Sleigh repeatedly emphasized that his confidence in gold and silver extends well beyond short-term technical movements. His investment philosophy is rooted in concerns surrounding fiat currencies, government debt, and the long-term stability of the global financial system. According to Sleigh, physical precious metals provide protection against risks that paper financial assets cannot avoid. He argued that investors holding cash or traditional financial instruments remain exposed to potential currency depreciation and broader banking system challenges, whereas owners of physical gold and silver continue to possess tangible assets regardless of monetary conditions. As he explained, "People that have been stacking metal will have no haircut. They have all their ounces." This belief forms the foundation of his long-term investment strategy. Rather than attempting to outperform every other asset class over short periods, he views precious metals as wealth preservation tools designed to protect purchasing power during periods of financial instability. Sleigh also suggested that silver currently offers particularly attractive long-term value compared to many conventional investments because equity valuations remain historically elevated. He expressed concern about technology stocks and other highly valued sectors, arguing that excessive price-to-earnings ratios create substantial downside risk should financial conditions deteriorate. In contrast, he believes physical precious metals continue to offer investors a defensive position heading into what he described as the later stages of current currency cycles. While acknowledging that volatility should be expected, Sleigh maintained that temporary price corrections do not alter the underlying investment thesis. Instead, he encouraged investors to continue accumulating physical metals during periods of weakness rather than becoming discouraged by short-term declines.
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Gold Outlook, Geopolitical Risk and the Role of Interest Rates
The conversation also shifted toward gold's outlook amid ongoing geopolitical uncertainty and expectations surrounding future Federal Reserve policy decisions. Sleigh disagreed with suggestions that recent price weakness marked the end of gold's multi-year bull market. Instead, he described corrections as a natural and healthy component of any sustained upward trend. He argued that even if gold requires several more years to reach substantially higher price targets, the broader bullish trend would remain intact. He referenced ongoing discussions surrounding potential gold revaluation while also reiterating his concerns about the long-term outlook for the U.S. dollar and other fiat currencies. Although he acknowledged that precise price forecasts are impossible, he noted that analysts continue discussing significantly higher long-term gold prices. Regarding geopolitical developments, Sleigh remained skeptical that current conflicts would conclude quickly. In his opinion, prolonged military spending contributes to increasing government debt, ultimately creating additional support for precious metals over time. While he avoided making definitive short-term predictions, he maintained that expanding fiscal pressures generally reinforce the long-term investment case for both gold and silver. Turning to interest rates, Sleigh explained that he does not closely follow Federal Reserve policy but offered his personal interpretation of how officials may respond to changing market conditions. He suggested that policymakers could leave rates unchanged if financial markets evolve according to expectations, raise rates if they seek to accelerate market weakness, or aggressively reduce rates should financial conditions deteriorate sharply. Regardless of the exact path, he believes lower rates following a significant market correction would provide substantial support for precious metals. His broader conclusion remained consistent throughout the interview: macroeconomic uncertainty continues to strengthen the long-term case for owning physical gold and silver.
Should Investors Take Profits or Continue Holding Physical Gold and Silver?
One of the final questions addressed whether investors should consider taking profits after the strong appreciation seen in both gold and silver over recent years. Andrew Sleigh made it clear that his own strategy remains focused almost entirely on long-term ownership rather than attempting to trade physical metals. While acknowledging that successful market timing occasionally occurs, he argued that it is usually only obvious in hindsight. Selling physical holdings in anticipation of buying back later introduces considerable risk because prices may continue rising unexpectedly. As he explained, investors who sold before previous advances could easily have found themselves unable to re-enter the market at attractive levels. Instead of attempting to capture every short-term movement, Sleigh believes most physical investors should continue accumulating over time. The primary exception involves monitoring the gold-to-silver ratio. He suggested that when the ratio remains elevated, investors may consider exchanging a portion of their gold for silver, potentially reversing the trade in the future if relative valuations change significantly. Outside of that specific circumstance, however, he sees little reason to reduce physical holdings. He also questioned the logic of converting precious metals back into fiat currencies if the long-term objective is preserving purchasing power. As he stated, "I'm buying metal to preserve wealth, and along the way I'm making money on it." Rather than selling because of temporary gains, he prefers maintaining ownership until the assets are needed for real-world expenses. For investors who recently entered the market near higher prices, Sleigh suggested that periods of weakness may actually represent opportunities to lower their average acquisition cost by continuing to accumulate. He concluded that while financial markets remain vulnerable to significant corrections, physical gold and silver continue to provide what he believes is one of the strongest long-term strategies for preserving wealth.
Conclusion
Andrew Sleigh's discussion reinforced a consistent long-term philosophy centered on wealth preservation through physical gold and silver ownership. While acknowledging that recent market volatility has challenged newer investors, he argued that the broader bull market remains intact and that temporary pullbacks are a normal part of longer-term price appreciation. Rather than attempting to trade every market movement, he believes investors should remain focused on accumulating physical precious metals while maintaining a long-term perspective. His views on currency risk, government debt, interest rates, and financial market valuations continue to support his conviction that gold and silver remain among the strongest defensive assets available for preserving purchasing power over time.
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Kellen Ainey (00:01)
Hi everyone and welcome back to the Ask Andrew Podcast. Once again, we're joined by Andrew Slay. Welcome back, Andrew.
So why don't we dive right in? We have quite a few questions here, a little bit longer longer worded as well. So Andrew, in our previous Ask Andrew session, you mentioned that silver hadn't had a particularly good year. One of our viewers commented and they pointed out that silver is still trading above fifty sifty dollars an ounce, and that compared to just a few years ago, that's a remarkable performance. Is this a matter of perspective? When you say silver hasn't had a good year, are you referring more to its performance relative to gold?
Were it were many expected to be by now or something else? How long should how should long term investors think about silver's performance in that context?
Andrew Sleigh (00:52)
So I was only referring to the amount of people that bought in January and on that move up and then it's pulled back. And so just from the January to now, it's been a struggling year. For all of us that have been holding prior to January, you know, it's most of us aren't under any water. You know, like we're all sitting here grumbling about it, but me my average cost is I'm not even sure, under forty bucks, you know, Canadian.
So referencing only the amount of people that were buying in in January and then we had that you know huge move and then you know the last six months has been a substantial pullback and so from that perspective it's not been fun for people that were jumping in maybe for the first time or whatever in the first part of the first month of the year. Other than that, long term, it's just a blip.
Kellen Ainey (01:46)
Okay, so you're really only referring to the people who recently got into silver. Really only in the late twenty twenty five, early twenty twenty six period, is that correct?
Andrew Sleigh (01:56)
Yeah, and when I mean late, I mean like December. 'Cause it yeah, I haven't studied the chart, but I mean to have it memorized. But you don't have to go back that much further when earlier in twenty twenty five you're probably still ahead or breaking even, you know, if you bought earlier in twenty twenty five. So I just haven't looked at the chart for a while and don't know what the numbers were. But but just that last couple of months before the crash. That's it.
Kellen Ainey (02:21)
Perfect.
Andrew Sleigh (02:24)
long term holding, I think that's part B of that question. So my views on long term holding, was that it?
Kellen Ainey (02:30)
Yes, how should long term investors think about silver's performance in that context?
Andrew Sleigh (02:38)
well from a chart perspective it certainly had skyrocketed and and then and re-retracted. In hindsight, it's par for the course, but most of us don't know that going in. for the last six months it's been a an accumulation phase where it's had this washout to form a base from where to move to the next level. So if we look at the last few years, we would have been celebrating
the current price of silver, whether in Canadian or American dollars. We'd be like, yeah, this is great. And then we have this big run up and then we have a pullback to, you know, what is it, ninety bucks roughly Canadian and and then whatever the the spot price is sixty, whatever that's in in say seventy dollars US for a coin, we'd be celebrating that a couple of years ago. And now this is where it's consolidated and be f the base of which we're to move from here.
Onward and we just have to get this this washout finished and then we'll start moving upward again and and moving from this position is pretty exciting. You know, we've been celebrating this position, but now we're gonna be moving from this position upward. So that's gonna be super interesting the next next over the next year.
Kellen Ainey (03:55)
Okay, so
So you would say as a long term silver investor, it's everything's still I wouldn't say all good, because again, as you mentioned, there's a little bit of sour grapes with the pullback, but everything's still there's still a lot of positives in investing in physical precious silver, is that correct?
Andrew Sleigh (04:16)
yeah. I I don't think there's I think it's a very hard spot to beat in my perspective. Because I also remember I'm not a fan of the fiat based financial instruments because they're under the challenge of the dollar's collapse and a banking collapse and all that kind of stuff. So whenever that occurs down the road, people that hold all that will have major haircuts, but people that have been stacking metal will have no haircut.
they ha they have all their ounces. So I don't think there's it's it's a very hard pressed situation to to have a better long term investment right now as we go into these end of currency cycles than gold and silver. Silver particularly.
Kellen Ainey (05:00)
All right.
Moving on here, more so a gold centered question. Traders tested a settlement below four thousand dollars an ounce last week, but the new level didn't hold, triggering a technical bounce. Investors continued to watch the situation in the Middle East and the economic outlook for cues on direction. The I the Iran war ended a multi year bull run for gold after it began in late February. How do you see gold positioning itself if the conflint continu if the conflict continues to escalate?
And how do you see gold positioning itself should tension settle?
Andrew Sleigh (05:39)
Well, I don't know if I can answer all that. so A, I don't think it's ended the bull market. this is you know, when you're talking about a large multi year bull market, there are periods where you have these pullbacks. And that's part of the healthy chart of of of anything really. So if we're looking at
in the course of the next few years, you know, there's the analysts that have lined up to say that gold will be X amount of dollars this year, next year, and and so on, so on. even if it takes three years to get to ten thousand US, I mean, how is that not still in a bull market? You know, when that goes two and a half times from where we are. so I I think this is just the part of the game of this of the financial system that's
transitioning. the the US dollar is in real trouble and will continue to be in real trouble and every currency on the planet that cannot back its currency with gold will go to nothing. And so I look at it as a purely defensive tool that what else do you hold besides gold and silver? Cash will be worth nothing and instruments that are in cash will be worth nothing. There'll be real challenges on all that. so I look at it as a as a position to
you lose the least. You still have gold and silver when all the stuff starts to to fade away. So coming back to the guy's question, I still see gold. I saw somebody the other day talk about an argument for gold to be eight thousand by the end of this year in US spot. And it was very credible. I c I can't repeat what he said because it was it was just kind of like a
had too many things on the go at the at the moment. But lots of numbers been thrown around. Revaluing the gold is still being kicked around in the US. You hear rumors of it. So gold with the war, the war is not gonna stop. So as far as if the if the war gets settled, this the war is not gonna happen. It's not going to stop for years in Iran. So as far as if the gold w if the
Goal if the war was stopped and settled in peace, you know, next month, it's that's not going to happen. They how many peace deals have they had so far in the conflict? Like dozen, you know, like dozens. And there was never any negotiations. It's all fake. So this war is now gonna go into a ground war in Iran, and that's gonna be a long term
Kellen Ainey (08:16)
More than a few.
Andrew Sleigh (08:32)
you know, problem. So they're spending money, creating debt like crazy on this. And so what does that have the effect of on gold and silver? No choice but for eventually they'll react. So that means going up
Kellen Ainey (08:48)
Exactly. Well when you put it like that, it's a it's a c it's a difficult argument to argue against, for lack of a better term. All right, let's see what else we have here. Okay, so over seventy per over seventy three percent of investors tracked by the CME Fed Watch tool are betting on interest rates staying unchanged at the next Fed policy meeting next week. While over seventy one percent see a hike rate in September.
What do you think will change from now until September that prompts a rate change?
Andrew Sleigh (09:26)
Well, I don't study that too much, but I'm gonna give you my my opinion on it. I think they're gonna hold rates until they're trying to time a market rolling over, in my opinion. And I think that's gonna happen in September, late September or very early October. So it's somewhere in that month five weeks area. So if the market's gonna roll over sooner than they want, they'll cut rates.
If the market is on schedule for where they think they want, they're gonna hold rates. And when the market rolls over and really has a a sharp correction, they'll be cutting rates.
Now, if the market is not on schedule as to what they want, then they will raise rates to speed up the acceleration of the collapse of the market.
So that could be if they're not on schedule, they go up, maybe they raise a quarter point. I think they're just gonna hold it because things seem to be on a disaster path n you know quite nicely as it is now. And so depends on when they want to have the market roll over. And when it does, they'll have no choice but to cut rates dramatically down towards zero. And then that will make gold and silver explode.
Kellen Ainey (10:45)
So just to con just to clarify here, you're even thinking that the rates in September are going to stay the same. Is that correct?
Andrew Sleigh (10:52)
Well, it's again it's a it's on it's based on what they feel the their their date timeline of the market you know having a collapse occurs. I don't know when they plan to do that, so I'm just reading the tea leaves and I'm just saying if they're on schedule they'll keep it the same. If they're behind schedule, they'll raise a quarter point and if they're behind schedule they'll they'll d sorry, they'll raise if they're behind schedule and ahead of schedule they'll draw.
So I I I can't say beyond that 'cause I do I don't really know what their schedule is.
Kellen Ainey (11:27)
Perfect. Looks like we do have time for one more question here. With gold and silver both trading well above where they were just a few years ago, many investors are wondering whether it's time to take some profits or continue holding. How do you decide when to fell when to sell physical precious metals if ever? Is there a price or market condition that would make you reduce your position, or are you focused on more on the long term fundamentals?
Andrew Sleigh (11:54)
long term fundamentals is my top priority on this. So nobody should be taking well I shouldn't say nobody. So if you're looking to to take profit, people who are doing that should be doing it in paper trades. That's more efficient. If you're doing it and you have physical, it's easy to do that in hindsight.
So for example, if you go back and look at January, anybody can go back and say, I should have sold on January twenty-ninth, because it started going, you know, falling after that, and then I could have rebought now and made a killing. Well, yes, you could. And then anyone can do that. But when you're if you sold two weeks prior to the January 30th drop, and it let's just say silver was trading at 150 Canadian.
And you're like, hey, I made out like a bandit, and for the next two weeks you watched it go to 170. Now what do you do? Like anybody can reverse trade. Okay. Okay, so then if if it kept going and nobody knows for sure, like if it kept going to kept going to 200 Canadian and then 250, and you sold at 150, what have you done?
Kellen Ainey (12:56)
Yeah, that is fair.
Andrew Sleigh (13:12)
Right? Like you've d it's created a disaster for yourself. And so all you can really do for people that are stacking is is continue to stack. And the only trades that I would make down the road is if you have gold and while the ratio is high, I think it's almost seventy to one right now for gold to silver. I haven't done it c after the last few days with silver moving up so much, so it could be less. but if you're if you're looking to do anything, sell a little bit of gold.
To buy silver because the ratio is still high. And then later, when the ratio reverses, whatever that is, a few years or whatever, then you can sell silver to go back to gold and get twice your gold, or three times your gold, or four. but as far as taking profit is concerned, this is the thing that's I don't necessarily I don't subscribe to it, is you're taking profit to go back into the currency which is worth nothing. That I never wrap my head around.
Even if it is maybe to reinvest, but then then you're lucky. So I've had I saw one or two clients during the January that sold and then two weeks later happened to buy again. And I said that was a very lucky trade. You know, they did very well with that. But most people, you know, would be not in that category. And so it's it's more challenging to sell the physical. it's easy if you have it in storage or it's it's easy if you do paper trades. Do paper trades.
you're gonna be probably hit with taxes if it's not an NTFSA. So I don't I don't sell because I don't I'm not I'm worried about is it available when I want to buy it back.
Kellen Ainey (14:55)
Okay.
Andrew Sleigh (14:56)
And if anything
happens, like if if all of a sudden tomorrow the whole system breaks, which we've all been anticipating for quite some time, but I'm buying metal to preserve wealth, and along the way I'm making money on it, like it's growing in value, and I have no concerns. That's why I'm in metal. And so those that bought in December, January for the first time were at elevated levels.
This is the time to average down and continue on buying in because the alternative, the stock market right now, is overvalued by ridiculous amounts. The PE ratios on the majority of stocks, certainly in the the Fang stocks, tech stocks, AI bubble stocks, they're like a thousand to PE ratio. Five hundred. Those PE ratios are so stratospheric, there's nothing there but disaster waiting to happen.
Kellen Ainey (15:46)
Yeah.
Andrew Sleigh (15:54)
So I don't sell metal and when I do it'll be only when I need to pay bills and if I don't have an income.
Kellen Ainey (16:05)
All right. Well you summed it up pretty pretty clearly there.
So with that being said, Andrew, it looks like that's all the questions we have today. Once again, I thank you for joining us. Thank you for educating myself and our viewers here. how was the best way to reach you?
Andrew Sleigh (16:23)
Thanks, Kellen. so you can call the toll-free number one triple eight eight six one zero seven seven five. My extension is two three zero. You can also email death of the dollar at sprottmoney dot com. And I'll do my best to get back to you as soon as I can. Thank you, Kellen.
Kellen Ainey (16:42)
Beautiful. Well once again, Andrew,
thank you once again, Andrew, thank you for joining us.
Andrew Sleigh (16:47)
Have a good day, guys.
Kellen Ainey (16:48)
Likewise, cheers. Bye bye now.
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