Strategists at ANZ Bank discuss Silver’s (XAG/USD) outlook.
Institutional investors to come back this year
“Strong fundamental backdrop and macroeconomic challenges should see institutional investors coming back this year.”
“While some demand is likely to level-off, we estimate supply will fall short by 140moz (12% of demand).”
“We continue to hold our bullish view and expect Silver prices to reach $26 by the end of this year.”
“A break of $24 could turn market sentiment bearish.”
See – Gold Price Forecast: XAU/USD could trade in the unchartered territory of $2,100 – ANZ
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“Silver prices rallied significantly during 2020 which has putSilver on track for its best performance since 2010. According to the latest analysis from ANZ, Silver prices are expected to continuously soar, with the XAG/USD forecast to reach a level of $26 by the end of 2020.
ANZ analysts commented that the recent rally in silver prices has been mainly driven by increased investment demand, with purchases amounting to 373 million ounces in the first six months of 2020 – the highest in more than forty years. Additionally, the continued pandemic-induced economic uncertainty combined with highly accommodative monetary policy have resulted in an influx of liquidity in to markets, creating a “perfect storm” for price growth. The silver market has seen significant investment in exchange-traded funds (ETFs), which have grown by 20% in the second quarter of 2020.
In terms of the outlook, ANZ analysts noted that silver prices will remain supported by any movements in gold prices, as well as the Metal’s industrial applications. ANZ expects the XAGUSD to reach $26 by the end of 2020, and urged potential investors stakeholders should consider further diversifying their holdings when expecting further upside.
Overall, the silver market remains optimistic for the remainder of the year in terms of price. After seeing a significant rally spurred on by increased investment demand and a “perfect storm” of economic uncertainty and liquidity-driven markets, Silver prices are expected to reach $26 by the end of the year. Investors should consider further diversifying their holdings as upside potential looks strong. “