Three Reasons To Be Optimistic About Silver In 2016

Friday, June 3, 2016

silver bullion

If an article with this title had come out in 2015, it would have been better timing. Silver hit its lows and started to come up this year, which means that if you moved in 2015, then you’re probably having a strong 2016. But is there room yet for silver to flourish, despite the recent trickling down of gold and silver prices?

Anyone who follows precious metals knows that such a question usually requires a subtle answer. That’s why we’ll answer it in three different ways, looking at recent news in silver to find if being cautiously optimistic on the precious metal is warranted where we stand today on June 2nd.

Reason #1: The Continued Bullishness Of First Majestic Silver Corp’s CEO

If you’re a regular reader of this space you’ll remember Keith Neumeyer, CEO of First Majestic Silver (NYSE: AG), saying some pretty bold things about silver. Namely, he thinks that silver can creep up to some $140 an ounce - well eclipsing its previous record high of about $50. Almost three times over.

But Neumeyer isn’t just a bull on silver. He also sees the precious metal gold rising high, as high as $10,000 an ounce. And if that were to ever happen, claims Neumeyer, then the truth about silver mining statistics suggest that silver would follow suit - according to Neumeyer, at some $1,000 an ounce!

“I’ve been quoted many times saying I expect to see triple digit silver, and that’s assuming gold doesn’t move,” Profit Confidential quotes the CEO. “If gold goes to $10,000, then silver will be some ridiculous number… could even be $1,000 silver.”

Profit Confidential points out that this would represent a rise in the silver prices by about 6,000%. Now those are some ambitious figures.

Reason #2: Even Sensible Forecasts Are Somewhat Optimistic On Silver

Okay, so maybe the CEO of a silver company isn’t convincing you that silver is about to go to quadruple digits. But there are other predictions to pay attention to, particularly Metals Focus’ Silver Focus report, which sees silver prices not only holding at their current levels, but ascending even further in 2016. That means that the time to get out of silver is not now, even if you don’t agree with the ambitious predictions of a Keith Neumeyer.

Citing stable demand while prices decreased over the previous few years, it appears that there is plenty of upward room for silver to keep going on its current pace.

Reason #3: A “Tightening In Supply”

S&P Global at Platts.com points out that silver supply isn’t quite keeping up, tightening the pressure on silver prices to move upward, if you’re a supply & demand junkie who pays attention to these sorts of market indicators. With less supply and perhaps 2% less mining production this year - and the recent news that U.S. mint bullion sales are going through the roof - suggest that silver may be headed upwards once more.

No matter what your reason, it appears that there’s a strong case for silver beyond just June. At just $16 an ounce, many investors believe they’re looking at a bargain. 

Darren Capriotti

Darren Capriotti has been a market analyst for the past decade and is an expert in precious metals. He prides himself on his ability to analyze the market and offer true value to investors with questions about gold, silver, and other precious metals. Highly educated, incredibly passionate, and more accurate than most, Darren offers a true, unbiased look into what investors can expect in the precious metals market. You can reach Darren at dcapriotti@gold-eagle.com.