Silver Price To Gain As Global Economic Conditions Continue To Concern

Further economic concerns will likely lift the price of silver!

Friday, August 12, 2016

silver price gain

In September of last year, I made the decision to start investing in silver, and I'm glad I did. Since my initial investment in the precious metal, I've earned nearly 40% on this move. While silver has become increasingly volatile recently, I'm not selling my position. In fact, I'm expecting to see further exponential gains! The reason that I started investing in the precious metal had to do with economic concerns. Now, I'm seeing more of the same. The truth is that economic issues around the world are only growing worse. Recently, we've heard news out of China and Europe that further solidify my opinion on silver. Today, we'll talk about the recent news, what it has to do with the price of silver, and what we can expect to see from the precious metal ahead.

Instability Seen In Chinese Economy

The Chinese economy is a very important one to watch. After all, China is the world's second largest economy in the world. Recently, economic data was released out of the region for the month of July, proving to bring on concerns.

First and foremost, industrial production growth has started to slow. In July, industrial production grew by 6% year over year. However, in the month of June, that growth rate was 6.2%; proving slowing growth. Retail sales growth has also slowed in the region. During the month of June, year over year growth in retail sales came in at 10.5%. However, in the month of July, retail sales grew by 10.2%.

Another big issue here is fixed-asset investment growth. During the period from January to July, analysts expected to see 8.9% year-over-year growth in fixed-asset investment growth. However, data from this period showed that fixed-asset investments grew by only 8.1% year over year.

European Economic Concerns Grow

Another story that I've been tracking closely is European economy. At this point, we all know that the European economy has been struggling for some time. We also know that the Brexit news out of the UK has weighed heavy on this economy. However, things are starting to get worse. In fact, in a recent bank stress test, we learned that the Italian banking system is a threat to the banking system across Europe. In a statement, Dr. Angus Armstrong, director of macroeconomics at NIESR, recently had the following to offer...

Balkanisation of EU finance comes at a time of financial fragility in the Eurozone banking system. This has added to the financial pressure on some of the largest European banks and the whole banking sector in Italy. As a consequence, growth in the Eurozone is revised down from 1.7 to 1.3 per cent in 2017.”

The above statement was followed up by Michael Hewson, chief market analyst at CMC Markets UK who had the following to say...

Investors are slowly realizing that with every spin of the central bank policy chamber the magazine is getting emptier, and in the absense of any will or ability of politicians to step up, central bank policy will continue to move into the realms of the more experimental with every passing day.

If last week's European bank stress tests were designed to bolster confidence in the European banking sector it is becoming quite clear that they have failed abysmally. Far from boosting confidence they appear to have helped undermine it by focusing attention on what wasn't tested, as opposed to what was.”

What This Has To Do With The Price Of Silver And Where Is The Price Headed?

As mentioned above, I started purchasing silver late last year as the result of economic concerns that started to show. At the end of the day, silver is a safe haven investment. This means that when economic and market concerns are high, investors look to the precious metal as a way to keep their money safe. With further negative economic data coming out of two of the top five global economies, safe haven demand for silver is likely to climb, leading to further growth in the price of the precious metal.

[Image Courtesy of Pixabay]

FREE Silver Phoenix 500 Newsletter!

  • Fresh insights on the Silver market and the economy
  • Leading authors from around the world
  • FREE
  • Stay informed!!

Joshua Rodriguez

Joshua Rodriguez is an avid financial professional. He is the owner and founder of CNA Finance, a partner at Modest Money, and a writer for US News & World Report, Investing.com, and more! Joshua takes a strong fundamental approach to market analysis and enjoys offering his take on what we can expect moving forward. You can reach Joshua at cnafinancehelp@gmail.com.