CPM Group: "Enormous Range of Issues to Rekindle 2018 Silver Demand"

Reuters  ( Original )
APR 24, 2018

Rising demand. Falling supply. Gold/silver ratio over 80. Huge retail short position. All the catalysts seem to be there. But when will silver really move? It’s the million-dollar question.

There is no magic box, no crystal ball, with the exact answer. But if market valuation reality does not align with underlying fundamental reality, it is a question of “when” and not “if.” Reexamine your reasons for buying, check your thesis. If it was sound to begin with and still holds, view the extended launch pad as a gift, a window still open to accumulate on the cheap before the spike.

Because, as history has shown time and time again, when silver does eventually move, it really moves.

The price of silver will depend heavily on trends in investment demand in 2018, but could get a boost from international political and economic risk purchases, CPM Group said on Tuesday.

“The enormous range of economic, financial and political issues facing the world and individual investors seems more likely to lead to a rekindling of silver demand from investors,” New York-based CPM Group said in its Silver Yearbook 2018.

Although spot silver prices are currently down about 1.6 percent this year, they often rise in tandem with gold prices in times of global political or economic uncertainty.

“While there is a lot of silver available in the world, compared to gold, and unlike gold silver tends to be liquidated from inventories more readily, there has been a decline in mine supply since 2016 which is expected to continue over the next decade. Declining mine supply and rising fabrication demand are expected to tighten the market,” CPM Group said, adding this could lead to an increase in prices

Jewelry and silverware demand is expected to rise for the seventh consecutive year to 306.1 million ounces in 2018, 8.9 percent.

ORIGINAL SOURCE: Silver price could increase in 2018 on safe-haven demand -CPM by Renita Young at Reuters on 4/24/18