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Silver Bullion Remains Good Value On Positive Supply And Demand Factors

– Industrial demand set to continue to climb from 2017, into 2018 and beyond
– Speculators are bearish on silver as net short positions in silver futures reach record
– Investment demand sees silver ETF holdings at eight-month high of 665.4 million ozs
– 2017 saw fifth consecutive annual physical deficit in scrap silver, of 26 moz
– Global silver mine production fell 4% last year, 2nd consecutive year of decline
– Fundamentals and speculative positions suggest silver may soon see strong gains

Editor: Mark O’Byrne

Silver poor mans metal

The Bearish Managed Money Positions Are A Good Sign 

Some analysts believe the current negativity surrounding silver could signal a turnaround. Bloomberg’s David Fickling wrote an astute article which is well worth a read on Monday:

‘As the stunning reversal of aluminum’s three-month decline last week demonstrated, commodity markets can go wild when bearish investors are caught short.’

SocGen’s own analysts are inclined to agree, when studying last week’s CFTC data they concluded that the industrial precious metal is now “oversold [and] generally vulnerable to short-covering.”

Industrial demand says industrious 


Source: GFMS Thomson Reuters


Silver Institute: Silver Will Outperform Gold 

Gold silver ratio

The ratio is back up above 80, something which has only been seen 3 times in the past. The World Silver Institute believe we should look at this as the market trying to tell us something:

The gold:silver ratio can rally in the face of a crisis, although the nature of such a crisis would dictate how the ratio develops. If circumstances suggest that market instability increases then investors would favor gold over silver. A good example

was during the 2008 global nancial crisis, when the ratio surged above 80. Meanwhile, a high ratio in the early 1990s was in response to the Gulf War. It is arguable that in anticipation of a crisis the market could see 80 or beyond. At the end of 2017, the gold:silver ratio was at 77 (though the full year average was just a moderate year-on-year increase to 73.9), a high level that perhaps suggests that the market is trying to tell us something. We suspect the high gold:silver ratio indicated that the market had been expecting another major crisis could be looming, or at the least that it was about time for equities correction, and therefore investors had been accumulating physical gold in the market.

Interestingly, the World Silver Institute Report’s own Johann Wiebe believes this high figure of 80 won’t be here to stay:

Wiebe believes that silver prices will rise and that the white metal will outperform gold in 2018 “purely based on the ratio argument.”

He continued, “[if] you look at the ratio it is at 82, and every time it pops above 80 … it reverses back because it is simply too cheap vs. gold. So in that sense, yes, I support that argument [that] silver will upsell gold.”

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News and Commentary

Gold up as investors hold onto positions; but risk appetite remains (

Gold settles slightly lower as stocks rise, dollar drifts higher (

Earnings Spur Stocks as Trade Woes Take Back Seat (

Dow up over 200 points as investors cheer earnings (

Factory Output in U.S. Cools After Surging in Previous Month (

IMF Spots Trouble Ahead for the Global Economy After 2020 (

U.K. Consumers Stay Under Pressure Even as Pay Squeeze Nears End (

Majority Of Investors Starting To Cash Out, Convinced Market Peaks In Second Half (

How Libor’s Surge Will Help Pop The Global Bubble (

Turkey withdrew gold from Fed amid crisis (

Gold Prices (LBMA AM)

17 Apr: USD 1,342.95, GBP 937.24 & EUR 1,084.57 per ounce
16 Apr: USD 1,344.40, GBP 941.21 & EUR 1,087.62 per ounce
13 Apr: USD 1,340.75, GBP 938.93 & EUR 1,087.35 per ounce
12 Apr: USD 1,345.90, GBP 951.01 & EUR 1,090.99 per ounce
11 Apr: USD 1,345.20, GBP 947.96 & EUR 1,087.86 per ounce
10 Apr: USD 1,335.95, GBP 942.25 & EUR 1,083.46 per ounce
09 Apr: USD 1,328.50, GBP 941.91 & EUR 1,082.33 per ounce

Silver Prices (LBMA)

17 Apr: USD 16.63, GBP 11.60 & EUR 13.44 per ounce
16 Apr: USD 16.60, GBP 11.61 & EUR 13.42 per ounce
13 Apr: USD 16.51, GBP 11.57 & EUR 13.40 per ounce
12 Apr: USD 16.66, GBP 11.74 & EUR 13.50 per ounce
11 Apr: USD 16.57, GBP 11.67 & EUR 13.39 per ounce
10 Apr: USD 16.49, GBP 11.65 & EUR 13.38 per ounce
09 Apr: USD 16.34, GBP 11.59 & EUR 13.32 per ounce

Average: 4 (1 vote)

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