Silver has dropped back again this year. But strategists at Commerzbank expect increasing Gold prices to lift Silver too.
Supply deficit likely to shrink on Silver market
“Global demand is likely to decrease as compared with its record high last year. Growing supply is anticipated at the same time: mining production is expected to reach its highest level since 2016 and the supply of scrap Silver to post the highest level in a decade.”
“As these two effects combined will probably mean that the supply deficit this year will not be even half as high as it was last year, the Silver Institute sees little potential for pronounced price rises this year. With its cautious prediction of an average price of $23 this year, it is more sceptical than we are.”
“We expect rising Gold prices in the second half of the year to pull up the Silver price too.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Read More
Global Metal Markets Likely To Be Bolstered By Rising Gold Prices In The Second Half Of The Year
Recent forecasts estimated by Commerzbank suggest that the balance of global metal markets will be significantly bolstered in the second half of this year by rising gold prices, pulling silver along with it.
Analysts and pundits continue to be bullish on the outlook for gold prices over the next several months, underpinned by a variety of factors. At the heart of the bullish outlook for gold is the likely easing of monetary and fiscal policies by major global central banks in response to slow economic growth, particularly from US-China trade tensions. The strengthening US Dollar is a major factor as well, in part due to the prospect of a much anticipated US rate cut from the Federal Reserve later this month.
This environment of low-interest rates and loose monetary policy are expected to support gold, particularly during periods of heightened geopolitical tension. This includes continued unrest in the Middle East and the trade friction between the US and China, which remain heightening investor demand for the safe-haven metal. As the price of gold continues to rise, it is expected to pull silver up with it, in line with the step-relationship over the past few years.
Recent estimations anticipate that gold could easily breach the 1,500 USD/oz. mark by the end of the year on the back of strong investor demand and increased liquidity. This undoubtedly has been priced into silver markets already, which is expected to soon begin to mirror the gains expected to be made by gold.
It has similarly been suggested that the precious metal price uptrend could extend into 2020, putting silver even more sharply in focus next year. This could lend further tailwinds to the silver market, potentially pushing prices higher across the board.
Given these forecasts, the outlook for the global metal market in the second half of this year is overwhelmingly bullish, with investor sentiment on the precious metal market likely to remain strong. Time will tell if this expectation will be met, however, for the time being, the outlook for metal markets appears strong.
