Silver's Supply & Demand
"Gold Is Heading for $3,000, Bank of America Says. ‘The Fed Can’t Print Gold.’"
Barron's • By Ben Levisohn • April 21, 2020
". . . Gold’s recent run began back at the end of September 2018, when the precious metal was trading at $1,465.70. Since then, it’s gained 15% to $1,689.60. And
if Bank of America’s Michael Widmer and team are right, the precious metal is heading a lot higher. Like 78% higher, to $3,000. The reason? “The Fed can’t print gold.”
Global Demand is Growing
• Bloomberg reports 50% silver demand upside by 2023 (January 2019). Currently at 3X the demand in 2008.
• Increased demand from top importers like China and India.
• An increasing number of products needing silver: solar technology, electric cars, batteries — especially for handheld devices —, medical applications, silk
screening circuit panels, and innumerable products sought by global populations entering the middle class.
• "There's been a sea change in investor sentiment that obviously drives precious metals, and silver takes it's cues from there." — Maria Smirnova, Portfolio Manager with Sprott Asset Management which oversees C$10.3B. (Bloomberg, January 2019.)
Production is Declining
• "Global physical demand will top supply this year (2019), according to... analysts at Societe Generale.... Silver use... has bulls betting on shrinking supply..." Supply growth has started to slow, more than for any other precious metal." said John LaForge, head of real
assets strategy at Wells Fargo Investment Institute." (Bloomberg, January 2019).
• Silver reserves are being used to fill the gap.
Average Grade is Falling
Silver Exploration Has Been Almost Nonexistent for the Last 7 Years
The cycle from initial exploration to full mining operations is about 10 years.
55% of All Mined Silver is Consumed
It can't be recycled.
The Price of Silver:
Linked to Gold
Bloomberg — January 2019
• "Goldman predicts gold prices to climb to highest since 2013."
• "Goldman... is leading a pack of bullish voices cheering for gold."
• “[Goldman] raised their price forecast for gold, predicting that over 12 months the metal will climb to $1,425 an ounce...”
• “... investors are not only closing bearish bets but are also adding to bullish positions...”
Historically, the price of silver tends to track the price of gold.
“Silver has outperformed all real assets
(real estate, commodities — even gold)
by a wide margin,
not to mention the stock and bond markets.”
The Silver Bull Market