Deflation would run counter to the bets some traders are currently making as they scurry into Treasuy Inflation Protection Securities (TIPS), betting the Fed is under-estimating how much inflation is poised to rise.
On the supply side, silver miners are finding less deposits and producers are expanding into new projects, which suggests that silver could be in shorter supply ahead.
“A further increase in negative rates would be very positive for gold, despite the fact that it’s soared year to date. If US banks try to pass negative rates onto depositors, many would pull money out and buy gold. Gold earns zero interest—but that beats getting charged just to hold your money in the bank,” adds HardAssets Alliance.
iShares Silver Trust
Tom Lydon’s clients own shares of GLD.