Daily Market Update

Silver Likely To Rebound On Falling Supply and Safe Haven Demand

World’s Largest Silver Mines Saw Production Fall 8% In 2018
by Capital Economics

• Despite weaker industrial demand, we expect silver prices to rally by more than 10% this year as safe-haven demand returns and mine production falters.

• To recap, the price of silver plunged last year, in line with industrial metals prices amid trade tensions, and Fed tightening. Around the turn of the year however, silver prices rallied, boosted by safe haven demand and fears of a global slowdown. Indeed, US silver coin sales have rebounded this year  and in February demand was strong enough for the US Mint to briefly run out of stock. That said, global growth concerns have now receded, and silver prices are no longer outperforming industrial metals.

• We think that silver will regain its status as one of the top commodity price performers in 2019. Crucial to this is that we think equity markets will fall as growth remains sluggish. This will heighten risk aversion and spark asset reallocation into safe havens, including gold and silver, and away from industrial metals.

• In addition, mine production is stuttering. We estimate that a dozen of the largest silver mines saw output drop by 9% in 2018. While they only account for an eighth of supply, they do highlight the headwinds. In particular, the Escobal mine remains closed and we don’t expect it to restart until 2020 at the earliest. Elsewhere, we think that lower prices for other metals should impede output from polymetallic mines. That said, production from zinc mines that produce silver as a bi-product may rise.

• Admittedly, silver industrial demand will be hindered by lacklustre economic growth. However, this will be partly offset by higher usage in auto applications including for defogging, and in infotainment systems.

• The upshot is that we expect the price of silver to rise to $17.50 per ounce by end-2019 from around $15.40 at present, fuelled in part by ETF demand rebounding to 100 million ounces.

April 18, Complimentary Storage In Zurich For 6 Month when you purchase the minimum amount of 10,000 ($€£) in physical gold and or silver for a limited time only


News and Commentary

Gold hits highest in more than a week; dollar, stocks retreat (Reuters.com)

Venezuela removes eight tonnes of gold from central bank – sources (Reuters.com)

Share rally cools as Trump turns trade heat on Europe (Reuters.com)

IMF says global economy cooling, coordinated stimulus may be needed (Reuters.com)

IMF cuts global growth outlook to 3.3% amid trade tensions, Brexit worries (Reuters.com)

Gold & Basel 3: A Revolution That Once Again No One Noticed (ZeroHedge.com)

China Moves To Ban Bitcoin Mining As Crypto Crackdown Continues (ZeroHedge.com)

Russia Will Soon Be 2nd In Global Gold Holdings (24HGold.com)

Will Recovery in Payrolls and Yield Curve Sink Gold? (24HGold.com)

EXTREME READINGS: Two Out Of Three Times This Happened It Top-Ticked The Stock Market (KingWorldNews.com)


Gold Prices (LBMA PM)

09 Apr: USD 1,303.00, GBP 995.13 & EUR 1,155.00 per ounce 
08 Apr: USD 1,297.10, GBP 993.58 & EUR 1,154.29 per ounce 
05 Apr: USD 1,288.90, GBP 985.11 & EUR 1,147.51 per ounce 
04 Apr: USD 1,291.60, GBP 981.87 & EUR 1,149.78 per ounce
03 Apr: USD 1,291.85, GBP 980.38 & EUR 1,148.84 per ounce

Silver Prices (LBMA)

09 Apr: USD 15.25, GBP 11.66 & EUR 13.53 per ounce 
08 Apr: USD 15.14, GBP 11.60 & EUR 13.47 per ounce 
05 Apr: USD 15.19, GBP 11.63 & EUR 13.53 per ounce 
04 Apr: USD 15.08, GBP 11.48 & EUR 13.44 per ounce
03 Apr: USD 15.16, GBP 11.51 & EUR 13.49 per ounce

Recent Market Updates

– Russia Dumps U.S. Dollars and Buys Gold As “Safety Metal”– How A ‘No Deal’ Brexit Could Lead To The “Lehmanization” Of Europe– Silver Bullion Set to Soar to $50 an Ounce (GoldCore Video)

– Perth Mint’s Gold Bullion Sales Surge 68% In March
– Central Banks Continue to Buy Gold at a Record Clip
– ItalExit and Cyber Risks in a Cashless World May Be Bigger Risks Than Brexit : Interview with GoldCore CEO
– Ireland and EU Countries Must Seek ECB Approval to Manage Gold Reserves – Draghi
– Global Risks Increasing – Underlining The Case For Gold in 2019 (GoldCore Video Presentation)
– Brexit and Learning To “Live With Boom and Bust Economic Cycles”

Mark O'Byrne
Executive Director


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