Fundamentals Point to Bullish Future for Silver
In a report published at MarketWatch, Investing Haven lead analyst Taki Tsaklanos said investors need to look at silver’s fundamentals.
We are bearish for 2017. But essentially, we see a once-in-a-decade opportunity in the gold and silver market.”
Analysts say basic supply and demand will drive the silver market in the future. Total silver mined in 2016 fell by 0.6% to 885.8 million ounces. Silver scrap supply fell to 139.7 million ounces in 2016, despite higher silver prices. It was the first decline in overall silver production since 2002.
Gold Forecaster founder Julian Phillips told MarketWatch silver supply in 2016 was dropped to its lowest since 2013, silver production was down last year for the first time in 14 years, and the market saw a supply deficit for a fourth year in a row in 2016.
Silver ignores its fundamentals or it would be now climbing.”
A major mine shutdown may squeeze supply even tighter. Tahoe Resources recently announced it halted operations at its Escobal Mine in Guatemala. This is one of the largest silver mines in the world. The license to run the mine was suspended in a dispute with an anti-mining organization. Chris Gaffney, president of EverBank World Markets, said a long shutdown could have a major impact on silver supply.
If the closure drags on to the end of the year or longer, then it could have more of an impact as this mine represents about 8% of the total global mine output.”
In his recent Gold Videocast, Peter said the current silver price offers an “incredible buying opportunity.” He pointed out that the price is almost at the same level it was in 2009.
And if you recall, at that time silver began a two-year rise that saw prices break $50 per ounce. That was a new record high … and of course, since that time, silver prices have fallen. But you know, even at $15 per ounce, we’re still about three times where we began the decade where silver prices were about $5 per ounce. So, the move from 2009 to 2011 was a ten-fold increase. But even though we’ve given back most of that rise, we’ve still seen the price of silver outperform the Dow Jones Industrial average since 2000. I believe the price we are seeing now is an incredible buying opportunity.”
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