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Silver’s 2013 numbers tell a sad story.
The precious metal’s spot price has dropped more than 30% since the beginning of the year, falling from over $30 per ounce in January to about $20 at the end of December.
Meanwhile, shares of iShares Silver, the largest silver ETF, have lost 35%.
According to Kitco, silver has the worst-performing commodity futures market for 2014.
But as the year draws to an end, the big question is where will silver go from here.
Of course, no one really knows but here’s what some analysts think.
Earlier in December, UBS cut its 2014 silver forecast from $25 per ounce to $20.50.
CIBC’s predictions are even tougher on the precious metal. The bank sees silver trading at as low as $19 per ounce, as reported by the Motley Fool.
Other banks see trading within that range.
Meanwhile, Bank of America Merrill Lynch offers the most hopeful forecast, predicting an average of $23.13 in 2014, as reported by Kitco News.
The bulk of silver demand is in fabrication, mainly for industrial applications but also for jewelery – boosted this year by India’s restrictions on gold imports.
And while silver prices have been falling, mints in Canada, the US and Australia have been reporting much higher sales over the past few months.
But according to research firm CPM group, even though investor demand has waned – and isn’t likely to bounce back soon – the next decade could see record highs for the precious metal.
3 Comments
Guest
Metals will rally when the KEREPORT has no sponsors left…can you imagine a worse group of companies to have been invested in?
2ndOrion
For 2014, it should rise when the non-backed stocks of the stock market crash very soon, and even farther in the upcoming silver extinction forecast for 2020. Know any good cheap Silver mining stocks? Should buy them very soon.
Thomas Borgsmidt
Well.
Prices are back to around midt 2010 level before the latest bout of hysteria. The last three years there has been a irregular, but steady linear decrease of about 10 USD/oz pr. annum.
That is unlikely to continue:
a) The 2010/11 idiocy was reasonably clearly investmentdriven speculation with a burst bubble. That bubble now seems to have deflated itself.
b) The continued fall in silverprices is likely to be exponential with a more or less constant percentual annual decay. This due to increased industrial use as prices get lower and silver becomes more interesting pricewise in applications.
Investmentwise – I don’t see price going up. Speaking from experience with a member of the family, that was a speculator and snakeoil salesman (really a genius in his own mind – somewhat surprised the americans managed to land on the moon without his assistance): Well, the inherited silverware was plate.
By the way: He hanged himself.
There seem to be a somewhat solid bottom around 5 USD/oz where heavier industrial use take over. Not that powerlines will be made of silver; but there are plenty of uses where the small improvement of silver over copper might be interesting – nothing that tonnagewise will affect copper, which in application is much more dependent on aluminium. But yes, it will influence silver prices.
When will silver hit 5 USD/oz again?
Barring inflation (which is unlikely for a long time) and idiotic speculation (always a possibility), an annual halving of prices will take two years. This is definately on the quick side of adaption, because that will involve taking losses, which everybody is at loath to do. Even a continued 30% annual decrease is unlikely, as we are now switching from linear to exponential decline, thus changing the nature of the adjustment.
Being a bit more conservative – we will probably see annual decreases of around 10-20% – more likely the lower estimate as that depends on the suicide rate of speculators, banks and “investors”.