Silver hasn’t been so cheap relative to gold for more than seven years and with silver ETF holdings having surged in recent days, silver coin and bar demand very robust and mine supplies forecast to contract this year, there are signs that silver is set to resume its bull market and outperform gold once again.
Eddie Van Der Walt and Ranjeetha Pakiam write in Bloomberg today:
Mine production of silver will probably drop in 2016 for the first time in over a decade and demand is set to outstrip supply for a fourth straight year, says Standard Chartered Plc. Much of the world’s silver is extracted from the ground with other minerals, and output cuts announced by the biggest miners will hurt supplies of the metal as well as others such as copper and zinc.
Silver’s 10 percent advance this year has trailed gold’s 18 percent surge as financial turmoil and worries about a global slowdown sent investors flocking to the yellow metal as a haven. An ounce of gold bought about 83 ounces of silver last month, more than any time since the financial crisis of 2008. That’s a signal to some that it’s relatively undervalued and will narrow the gap.
More than 50 percent of demand comes from industry, including about a quarter from electronics, and to some extent silver’s fortunes follow those of industrial raw materials such copper, zinc and lead. The London Metal Exchange index of six metals has climbed about 14 percent since slumping to the lowest level in more than six years in January.
Silver may climb about 18 percent to about $18 an ounce by the end of 2017, according to Julian Jessop, head of commodities research at Capital Economics Ltd. in London. Assuming the world economy avoids a sharp downturn and prices of industrial metals continue to recover, he predicts that silver will outperform gold and the ratio could return to 70.
Read full article on Bloomberg here
LBMA Gold Prices
10 Mar: USD 1,247.25, EUR 1,137.04 and GBP 876.67 per ounce
09 Mar: USD 1,258.25, EUR 1,146.69 and GBP 884.16 per ounce
08 Mar: USD 1,274.10, EUR 1,155.69 and GBP 894.35 per ounce
07 Mar: USD 1,267.60, EUR 1,156.96 and GBP 896.13 per ounce
04 Mar: USD 1,271.50, EUR 1,158.67 and GBP 898.93 per ounce
Gold News and Commentary
Gold prices dip further in Asia as China CPI data higher than expected – Investing.com
Gold dips as stocks, dollar strengthen ahead of ECB meeting – Reuters
U.S. Stocks Gain With Commodities as Euro Fluctuates Before ECB – Bloomberg
Jewelers in India Losing $150 Million a Day as Strike Continues – Bloomberg
Indian government calls meeting on gold monetization scheme’s lack of success – Business Standard
If Gold Has Turned Bullish, Can Silver Be Far Behind? – Seeking Alpha
Gold looks overbought – but it just keeps going up – Frisby – Money Week
82-year old argument for gold at $8,000 per ounce – MW via YouTube
Global Leading Indicators Fall Sharply Into 2016 – Financial Sense
China’s Global Gold Strategy – Middelkoop – Epoch Times
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