However, when the data was finally collected, it turned out that physical silver investment was the leading growth sector in the silver market in 2018… by a large degree. And, we can thank super-strong Indian silver demand for pushing physical investment to double-digit growth instead of a substantial decline.
Now, if we look at the information released by the Silver Institute back in November 2018 (Silver Interim Report), it stated that silver coin and bar demand was estimated to drop by 12% in 2018:
Bar and coin demand will be the main driver behind the fall contracting another 12.2% to 124.8 Moz in 2018. New physical coin demand has remained under pressure this year, particularly in the United States during the first half of the year, as investors relied on the secondary market with older dated coins for their investment needs. Physical bar and coin demand in other regions has also been disappointing this year, contracting mainly in the single digits as investors remained on the sidelines awaiting higher price volatility.
Thus, overall global silver demand was expected to decline by 3% in 2018, mainly due to the large drop in coin and bar purchases. However, when the report came out just a few days ago, silver coin and bar demand surged by 20%. Investors purchased a stunning 181.2 million oz (Moz) of coin and bar, 45% higher than the 124.8 Moz forecasted in November last year:
If we look at both charts, the GFMS analysts were spot on with Industrial silver demand. Industrial silver demand fell modestly in 2018 due to a decline in PV Solar sector. According to the 2019 World Silver Survey, while Photovoltaic manufacture increased in 2018, actual silver consumption in PV solar cells and films fell by more than 8 Moz.
Stocks Now Trading Like Cryptos
For example, Disney’s stock price surged by $16 in two days on the news that the company plans on providing a cheaper streaming content to compete with Netflix. When Disney’s stock price closed on last Thursday, it was trading at $116.50. The next day when the market opened, Disney was trading at $128 and then continued higher to $131. By the next day, Disney surpassed $132.50. Thus, the mere announcement by Disney that they would be competing with Netflix motivated investors to push the stock up 14%… similar to how the cryptos trade.
While Disney’s stock price skyrocketed by $16 over the past two days, it took the company 14 months to experience the same movement from its low in March 2009 to its high in May 2010. Yes, it’s really NEAT that Disney will be competing with Netflix, but is that really a good idea in the first place? I mean… come on. Netflix still isn’t making money if we look at its free cash flow. Netflix’s total free cash flow was a negative $7.2 billion over the past four years… with -$2.8 billion for 2018 alone.
And if you think Disney’s price move is something… take a look at what happened to QCOM. The company announced a favorable settlement with Apple on Tuesday at 3 pm, and the stock price soared by more than $24 in less than two days. QCOM surged from $58 on Tuesday to $82 Wednesday.
After the Tech Boom Crash in 2000, QCOM fell all the way back down to $10 in 2002. My forecast for QCOM after the next market meltdown is to fall to at least $25, its long term resistance level.
Gosh, when was the last time gold went up 5% in a day… LOL. If we base the gold price on $1,200, a 5% move would be $60. I can’t remember the last time gold went up 5%, much less 14% like Disney or 40% like QCOM. These stocks are now behaving like cryptos, and that is not a good sign.