Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Citigroup Projects $30 Silver in the Next 6 to 12 Months

  by    0   1

Citigroup projects silver could rise to $30 an ounce in the next six months to a year.

With silver currently in the $23.00 range, this represents a possible 30% return.

We think recent price weakness offers a strong dip-buying opportunity, reiterating our call for $30/oz silver over the next 6-12 months as US growth rolls over, even if emerging markets growth stagnates.”

Silver is currently in a dip. The white metal is down almost 7%  this month after cumulative gains of 20% over the past two months. Silver was above $26 at one point. But the dip appears to be temporary.

Citigroup analysts aren’t buying the Federal Reserve’s hawkish posturing. They think interest rates will fall in the near future as a recession takes hold.

We expect silver would rally in anticipation of the fall in US interest rates and real yields that will likely accompany an anticipated rollover in US growth in Q4’22 or early 2024. This should weigh on the dollar, with Citi economists expecting US rates and the dollar to weaken further.”

Citigroup analysts said these dynamics should underpin demand for ETF silver.

Weaker competition for investment capital from other asset classes should also support silver pricing as markets increasingly price US recession risks.”

They also expect a potential increase in demand for silver in China.

Our economists expect China to continue to gradually recover and any associated rebound in EM [emerging market] growth sentiment could be an incremental tailwind for silver. … We expect China demand could recover in 2H 23 following further easing measures by the PBoC.”

There are other bullish signs for silver the Citigroup analysis didn’t mention.

The silver-gold ratio still indicates silver is on sale.

The current silver-gold ratio is just over 83-1. That means it takes over 83 ounces of silver to buy an ounce of gold. To put that into perspective, the average in the modern era has been between 40:1 and 50:1. Historically, the ratio has always returned to that mean. And when it does, it does it with a vengeance. The ratio fell to 30-1 in 2011 and below 20-1 in 1979.

Historically, when the spread gets this wide, silver doesn’t just outperform gold, it goes on a massive run in a short period of time. Since January 2000, this has happened four times. As this chart shows, the snapback is swift and strong.

The supply-demand dynamics also look good for silver.

Silver demand set a record in every category last year, including industrial demand. Industrial offtake accounts for about half of the global demand, and that is only expected to increase in the years ahead as the push toward “green energy” continues.

Silver is an important component in solar panels. According to a study by scientists at the University of New South Wales, solar manufacturers will likely require over 20% of the current annual silver supply by 2027. And by 2050, solar panel production will use approximately 85–98% of the current global silver reserves.

On the other side of the equation, supply was flat last year and it’s expected to be flat again in 2023.

Record global silver demand and a lack of supply upside contributed to last year’s 237.7 million ounce market deficit. It was the second consecutive annual deficit in a row. The Silver Institute called it “possibly the most significant deficit on record.” It also noted that “the combined shortfalls of the previous two years comfortably offset the cumulative surpluses of the last 11 years.”

Based on the supply and demand fundamentals and Citigroup’s analysis, this may be the perfect time to buy silver.

Free Silver Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Which Central Banks Are Selling Gold?

Central bank gold buying has been a significant factor in the yellow metal’s spectacular run-up to new record highs. But with its recent small correction downward, it’s a good time to look at which central banks are selling — and why.

READ MORE →

Death of Iranian President Carries Gold, Copper to New Record Highs

Amid ongoing tension in the Middle East, Iranian President Ebrahim Raisi and the foreign minister have been confirmed dead Monday after a helicopter crash. The officials’ shocking demise casts additional investor doubt on a region already plagued by economic upheaval, with supply chain uncertainties fueling record-high metal prices this week.

READ MORE →

South Korea’s New Way to Pursue Safety

While gold bullion is most often sold in bar or 1oz coin form, the Korean retail market is benefitting from gold’s latest success with a very atypical marketing strategy. It has been traditionally thought that investors prefer larger increments of bullion because they simplify calculations and have a lower transaction cost than buying the same amount of gold in smaller increments. Demand for traditional bars and coins in South […]

READ MORE →

What Will CBDCs Mean for Gold?

With the eventual introduction of central bank digital currency (CBDCs) now seemingly inevitable, there are a lot of directions central banks could take with their digital currency projects that would have dramatic implications for the price of gold.

READ MORE →

Will the World’s Most Pro-Bitcoin Politician Embrace Gold?

Since Nayib Bukele became president of El Salvador, El Salvador has been in American media and global political discussion more than ever. While much of the attention focuses on Bukele’s mass incarceration of gang members and a decline in homicide of over 70%, Bukele has also drawn attention to his favoritism towards Bitcoin and how he […]

READ MORE →

Comments are closed.

Call Now