Economic Times/12-27-2016
“Commodity experts and bullion traders feel that silver can trump gold in coming months as demand for the metal is increasing for solar panels and electronics sector. Demand for silver is increasing in the home décor and fashionable jewellery categories in the country which may push the price of the metal by almost 15-20% in 2017, feel the traders and analysts.”
MK note: Silver is up 14.5% in 2016 even after the sharp year-end correction. It has clearly outperformed gold which gained 7% this year as reported further down the page. Silver investors, we know from direct experience working with our clientele, view silver as a safe-haven alternative to gold with the added bonus of stronger upside potential (Experience also tells us it also has stronger downside potential.) I should add that silver also outperformed the stock market in 2016.
Silver sales at USAGOLD have steadily and markedly climbed year over year the past few years and we suspect that sales will be strong at the start of the year due to the currently low price level at around $16 per ounce. Last summer we experienced a strong increase in investor interest at the $16 to $18 price level. Then prices jumped to near $21 before correcting into the end of the year.
One of the more interesting points made toward the end of the linked article is that silver demand in India is likely to increase due to investor concerns that the government there will continue its war against gold ownership, and could attempt to curtail or stop imports. That war, we feel, is doomed to failure. India’s government is fighting thousands of years of culturally ingrained, deep attachment to gold. In the interim, however, practicality may carry the day and silver at some level would become, as the headline at the top suggests, the new gold in India.
If even a small amount of India’s massive gold interest were to migrate to silver, it could cause supply disruptions and premium increases here in the United States. We have seen before the hair trigger relationship between ramped up physical demand and premium increases. The physical silver market globally in terms of availability is not nearly as deep and liquid as gold, and a heavy source of new demand could become problematic. At the moment, premiums are higher toward the end of the year, but modestly so.
