- Investment Week: Silver Attracts Amidst Uncertainty
- The Silver Institute: Silver Investing Predicted to Hit an Eight-Year High
- Business Recorder: Gold Will Slow Due to Recovering Economy
- Yahoo!Finance: Are Commodities Reaching a Supercycle?
Image: Investment Week
Investment Week: Silver Attracts Amidst Uncertainty
Silver, traditionally known as the devil’s metal due to its extreme volatility, has outshone gold by rising 121% from March 2020 to September. This year silver has already proven its reputation by rising 18% and then falling 11% soon after. Still, the interest in silver has remained high due to its demand in green technology and strong tailwind – it’s no surprise silver is forecast to be the best performing metal of 2021.
The increased demand for physical silver has raised worries whether the supply can meet the growing demand. Some voices in the industry wonder where all this silver is coming from? Ian Williams of Charteris Treasury Portfolio has highlighted the small size of the silver market, while Metals Focus doesn’t believe that the demand will outpace the supply just yet.
Opinions remain mixed on silver: some analysts point out to bearish signs like the lessened industrial and jewellery demand that won’t be recovering soon, while others remain hopeful that the demand for safe haven assets tied to a restricted supply will coast the tide until the industry demand grows. Juliet Schooling Latter from FundCalibre believes that silver won’t be abandoned as it “offers something real and tangible in a world of manipulated markets”. Still, investors should remain aware of the metals volatility.
15.2.2021, James Baxter-Derrington
The Silver Institute: Silver Investing Predicted to Hit an Eight-Year High
Silver’s demand is expected to rise this year thanks to the improving global economy. The global investment is expected to hit an eight-year high of 1.025 billion ounces thanks to industry demand and physical demand (which in itself is predicted to soar to six-year highs). However, a slower than expected global recovery from the pandemic could discourage investors from relying on silver. All on all, the Silver Institute remains optimistic about silver’s prospects for the year due to three key insights on silver price, demand and supply.
Last year the average silver price increased 27% to $20.52. The loosening of monetary policy and declining interest rates encouraged investors to buy silver and other safehaven assets. The year 2021 started with a jump in retail investor demand that lifted silver to an eight-year high of $31.10, while the gold-silver ratio fell to 62. Outlook for silver remains extremely positive: the overwhelming demand of the physical supply has caused product shortages (which can be offset by a weak Indian demand).
The current global forecast for physical demand is 1.025 billion ounces, which would cover for all losses sustained in 2020. Industry, physical, jewelry and silverware demand are expected to provide critical gains with significant growth in all sectors. Especially the industry demand is projected to reach four-year highs 510 Moz. Jewelry demand will recover to around 174 Moz though it will remain under pre-COVID-19 levels.
Mine production output is expected to recover from 2020 level and rise to 866 Moz. Most mines affected by the pandemic have recovered, and growth will be aided by primary silver mines and new projects in Mexico and Australia. It’s projected that in 2021 silver’s physical surplus will be the lowest since the 2015’s deficit.
10.2.2021, The Silver Institute
Business Recorder: Gold Will Slow Due to Recovering Economy
Analysts have lowered their expectations for gold: according to most recent forecasts gold will average at $1900/oz in the January to March quarter, $1925 for the full year and $1908 in 2022 – lower than a similar poll three months ago predicted.
Ross Norman, an independent analyst, expects gold to still perform well, but at a more subdued rate. It has benefited from the Central banks’ actions and the financial market’s vulnerability, but the recovery of the global economy can also make it less attractive by raising bond yields.
Silver followed gold last year in its developments rising to $29.84/oz during summer, then falling to $25. This year the prices are predicted to average $25.86, and $25.30 in 2022.
Yahoo!Finance: Are Commodities Reaching a Supercycle?
Analysts at JPMorgan believe that a new commodity upswing and oil up cycle has started. Driving factors of this long-term boom are the strong recovery from the pandemic, measures against inflation – and also an unintended side-effect of the climate crisis, which could constrain oil supplies and boost the demand of metals used in the green energy industry.
Last commodity supercycle peaked in 2008, after 12 years of expansion. That cycle was driven by China’s economic rise, while the current one benefits from the pandemic recovery, loose fiscal policy, the weak U.S. dollar, strong inflation and aggressive environmental policies.
Commodity prices are hitting their highest in six years with corn and soy benefiting from Chinese demand, copper hitting an eight-year high, and oil staging a strong recovery from the worldwide supply glut.
11.2.2021, Gerson Freitas Jr.
This is Jalonom’s weekly review of interesting precious metal news from different international sources. We wish to offer the reader a compact and quick to read review of weekly news. Especially we focus on news relating to gold investing.