Analysts say the price of silver could hit $30/oz this year, the highest since February 2013, driven by tight supply of the metal, as well as silver’s tendency to gain more gold in periods of high inflation.
Silver is in short supply, according to Nicky Shiels, head of metals strategy at precious metals company MKS PAMP, noting significant reductions in physical stocks available at physical hubs in New York and London, “more than you see in the Prayed”.
Shiels expects silver to post deficits of more than 100 million ounces over the next five years, with industrial demand – nearly half of total demand – causing supply shortages, Shiels said.
Citing silver’s track record of generating returns for investors of nearly 20% per year in years when inflation is high and silver remains cheap relative to gold, silver could rise to $30 an ounce this year, ABC Bullion chief financial officer Jackie Simpson said on CNBC, even as the outcome would likely offer significant resistance.
Silver Comex to the previous month (XAGUSD:CUR) for delivery in January liquidated –2.6% at $23,830/oz this week, the worst week for the metal since mid-November.
ETFs: (NYSEARCA:SLV), (PSLV), (SIVR), (SIL), (SILJ), (SLVP)
According to the silver institutesilver supply from mine production in 2022 totaled 843.2 million metric tons, still below the decade peak of 900 million ounces in 2016, and silver supply generally does not respond quickly to changes in demand because silver mines supply only ~25% of the total. Randy Smallwood, president of Wheaton Precious Metals (WPM), said.
Long-term investors have a long-term buying opportunity for silver at $19-$20/oz, writes Muhammad Umair in an analysis recently published in Seeking Alpha.