We are currently seeing silver prices showing steady gains however the silver market can be very volatile. People are catching on to the possibility of prices surges in silver. Maybe now is the time to invest in silver.
From February 2016 to now silver prices have shown steady gains. The prices improved after the Brexit vote in the summer. Unlike gold, silver prices rely heavily on the COMEX. However according to silver analyst Ted Butler there is a new type of silver buyer, these are people buying and holding onto silver rather than trading. This is causing a lot of disruption for silver trading and more people are becoming desperate to buy physical silver.
After years of analysing the markets, Butler believes the technical hedge funds are the big buyers and sellers who move the prices. They will trade in and out of their position based on price movements. There are two positions you can be in terms of stocks. Those in long position are buying stocks and waiting for prices to rise and those in a short position will sell before buying with the expectation to buy stock back at a lower price and will gain a profit. However there is a massive mismatch in figures regarding what traders think they hold and what actually exists or is actually available.
Supply and Demand
Silver mine production is predicted to decline over the next few years. Silver may have reached its mine supply peak in 2015 as silver mine production was lower in 2016. The demand for silver is increasing with each year. Between the years of 2010 and 2016, we saw five times the amount of silver purchased than gold. Silver does not hold the same value as gold however the demand caused more of an impact for the silver market than the demand on the gold market. This has caused 17 consecutive years of silver deficits and with a declining mine supply further annual silver deficits are to be expected.
People may be forced into investing in silver to protect their wealth especially with the current state of the Fiat Monetary system and the debt it holds. However the Paper silver market is extremely volatile with some silver analysts saying the collapse of the market may be soon. The paper silver market is just being treated like a ticking time bomb. On the down side, these predictions have been going on for over a year and no one can say when it will actually happen. However if the market does collapse, silver prices are expected to show much higher price gains than gold.
Silver Price Predictions?
There are other key indicators which may drive up silver prices in 2017. Silver sales at mints have been high. These high sales have been seen at mints around the world. Silver is also becoming increasingly popular in India. India is known for being one of the largest importers of gold. If they turn to silver this will definitely drive up prices. Silver is a versatile metal. It’s not just a popular investment purchase. The metal is used on an industrial level too, especially within technology. With technology growing the amount of silver required for technology is also growing.
In 2016 silver prices increased for the first time since 2011. There is a great possibility we may see a repeat performance in 2017. Finally there is also the geopolitical uncertainty we will be facing throughout the world. We have Trump and his unpredictability and the various European elections. Political uncertainty tends to cause bullion prices to increase.
You can track the silver price on our live charts here to see how world events affect the price of silver and to help you choose the right time for you to invest in silver. If you are looking to invest in silver click here to view all the products we have to offer.