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Analysts say the price of silver could hit $30/oz this year, the highest since February 2013, driven by supply shortages of the metal as well as the tendency for silver to outgain gold in periods of high inflation.
Silver is in a shortage, according to Nicky Shiels, head of metals strategy at precious metals company MKS PAMP said, noting significant drawdowns in available physical stocks held in New York and London’s physical hubs, “more so than seen in gold.”
Shiels expects silver will post deficits of more than 100M oz during the next five years, with industrial demand – nearly half of total demand – sparking the tight supply, Shiels said.
Citing silver’s track record of delivering investor returns of nearly 20%/year in years where inflation is high, and how cheap silver remains relative to gold, silver could climb to $30/oz this year, ABC Bullion CFO Jackie Simpson said on CNBC, even as the outcome likely would offer significant resistance.
Front-month Comex silver (XAGUSD:CUR) for January delivery settled –2.6% to $23.830/oz this week, the metal’s worst week since mid-November.
ETFs: (NYSEARCA:SLV), (PSLV), (SIVR), (SIL), (SILJ), (SLVP)
According to The Silver Institute, the supply of silver from mine production in 2022 totaled 843.2M metric tons – still below the decade’s peak of 900M oz in 2016 – and silver supply generally does not respond quickly to demand changes because silver mines supply only ~25% of the total, Wheaton Precious Metals (WPM) President Randy Smallwood said.
Long-term investors have a long-term buying opportunity for silver at $19-$20/oz, Muhammad Umair writes in an analysis published recently on Seeking Alpha.
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