Trading near $15.50 an ounce, silver is down roughly 70% over 2011 highs of around $50.00 an ounce. On top of that, many expect silver prices to average just $13.00 per ounce in 2015. That said, there are a number of catalysts that actually point to a rebound in silver prices.
First, the bull market in stocks recently celebrated its 6th year anniversary and is up more than 200% since the Federal Reserve implemented its unprecedented monetary policies. According to the CAPE PE ratio, the stock market is overvalued by 70%, the last time it was this overvalued was in 1929 and 1999.
Second, while silver and gold are both used as a hedge against economic uncertainly, only silver benefits from an improving economy. The U.S. economy is projected to increase by 3.6% this year and 3.3% next year while emerging and developing economies are forecast to grow at 4.4% in 2015 and 4.7% in 2016.
Finally, Silver prices could also increase on near-term supply issues. Production of is collapsing in many major silver producing countries; with prices so low miners have less incentive to produce high volumes. This comes at a time when demand for silver remains strong in India and China, the two largest consumers. Demand in the U.S. also remains robust.
Silver could surprise investors to the upside in 2015. For long-term silver investors, current prices and long term outlook points to another great entry point.”