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2020 Silver Secrets Report - The Case for $18 Silver by Year-End 2019 and $20 in 2020- 1st American Reserve 2019 prediction

Posted by 1st American Reserve on

In July of 2019 this was an article we ran - looks like it is coming true.

A number of mainstream investment banks and commodity market analysts see fundamental reasons why silver ought to be higher – perhaps $17 to $18 later this year – even though silver remains mired around $15 now. Three major banks have issued price projections of $18 for 2019: Bank of America Merrill Lynch, Natixis and ABN AMRO. In addition, the commodity market analysis group Capital Economics predicts $17.50 silver this year. Some private firms Silver will hit $20 in 2020have predicted even higher prices of $20 and more.

Their reasons are fundamentally sound: Positive investor sentiment has driven higher bullion coin sales, while industrial demand has also risen, and new supply has fallen slightly over the previous year. Rising demand and falling supply generally yield a rising price, unless massive amounts of old supplies come onto the market.  In addition, there are the financial considerations that also impact gold: falling interest rates in the U.S. and around the world, soaring debt levels in the U.S., and a weakening U.S. dollar as a result.

 

Here are the supply/demand realities: According to the Silver Institute, global silver demand hit a three-year high in 2018, surpassing one billion ounces after falling just short of one billion ounces in 2017. At the same time, global silver mine production fell for the third straight year, falling 2% to 855 million ounces.  Total new supply fell 2.7%, from 1,032.6 million ounces in 2017 to 1,004.3 million ounces in 2018, while demand grew 3.5%, from 998.4 million ounces in 2017 to 1,033.5 million ounces in 2018.

That means there was a 34.2-million-ounce silver surplus in 2017 (surpluses tend to depress prices), while there was a 29.2-million-ounce shortfall in 2018. (Shortfalls tend to boost prices.)  These shortfalls and surpluses aren’t always reflected in immediate price action, since speculators tend to control the price of the metal on the futures market by bidding the price up or down based on their own future expectations, but supply and demand win out over time, as shrinking supply and rising demand create higher prices.

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