In a recent interview on Commodity Culture, Shawn Khunkhun, the Chief Executive Officer of Dolly Varden Silver, laid out his expectations for the precious metals market amidst escalating geopolitical tensions, particularly the burgeoning trade war between the United States and China. Khunkhun, a respected voice in the resource sector, articulated a compelling case for silver potentially outperforming gold in the current climate of uncertainty.
"Crazy times we're living in," Khunkhun remarked at the beginning of the interview, setting the stage for a discussion on the volatile global landscape. He emphasized that in such a "fractured world that we're stepping into with all this uncertainty, uncertainty drives investments into hard assets."
Silver: A Critical Metal in a Fractured World
Khunkhun's analysis heavily focused on the role of silver, highlighting its dual nature. While acknowledging gold's traditional safe-haven status, he argued that silver's critical industrial applications give it a unique edge. "As we look at critical metals, and you know, silver being critical, this bodes well," Khunkhun stated, suggesting that the demand for silver in various industrial sectors, from electronics to green technologies, will provide a strong fundamental underpinning.
He also addressed silver's reaction to recent market events, noting its dip following what the interviewer, Jesse Day, referred to as "Liberation Day" and subsequent tariff announcements. Despite this initial pullback, Khunkhun pointed to the robust industrial demand, citing Silver Institute data indicating that a significant majority of silver demand is industrial. He also noted the resilience in investment demand, with anecdotal evidence suggesting wealthy investors are shifting from gold to silver, capitalizing on the historically high gold-to-silver ratio.
"I suspect we're going to start to see silver outperform gold," Khunkhun boldly predicted. However, he also pondered the necessary catalyst for this shift, questioning whether it would be "some type of clear catalyst? Do we need a rate cut? Do we need QE?"
Gold's Enduring Appeal Amidst Dollar Concerns
While bullish on silver's prospects, Khunkhun also acknowledged gold's enduring appeal as a haven. "For 5,000 years, gold has been a haven, it's been a store of value," he noted. He highlighted gold's impressive performance, even reaching new all-time highs amidst market downturns.
A key point in his analysis was the potential weakening of the U.S. dollar. "We're starting to see the dollar roll over," Khunkhun observed, suggesting that a weaker dollar could further fuel gold's ascent. He drew a historical parallel, noting gold's strength in 2008 when the dollar index was significantly lower.
The interview also shed light on Dolly Varden Silver's strategic advancements, most notably its recent listing on the NYSE American under the symbol DVS. Khunkhun hailed this as a "huge milestone" for the company, providing access to the vast U.S. investment market.
"For five years, I was relying on less than 10% of North American capital to grow my business, and today I get to go to the biggest market in the world," he explained, emphasizing the increased liquidity and visibility the NYSE listing provides. He also highlighted that Dolly Varden is one of only a handful of silver equities traded on this major exchange.
Khunkhun underscored the company's strong financial position and upcoming exploration initiatives. "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," he announced, pointing to drilling programs as potential catalysts for value creation.
Looking ahead, Khunkhun discussed the current underownership of precious metal stocks by institutional investors, expressing optimism that a sector rotation could significantly benefit companies like Dolly Varden. He detailed the criteria some large institutions have for investment, such as minimum share price and trading volume, suggesting that the NYSE listing is a crucial step in attracting broader institutional interest.
"The big bet we at Dolly Varden are making is that when that shift occurs, when that move from when that sector rotation occurs, it's too late to then try to make that move. You have to be there before it happens," Khunkhun asserted.
Shawn Khunkhun's interview on Commodity Culture painted a dynamic picture of the precious metals market, driven by geopolitical uncertainties and evolving economic factors. His expectation for silver to potentially outperform gold hinges on its critical industrial demand and the possibility of increased investment flows. For Dolly Varden Silver, the NYSE American listing marks a significant step towards greater visibility and access to capital, positioning the company to capitalize on the anticipated shifts in the precious metals landscape.