Silver is having a stellar 2016, and is even outperforming gold. Year-to-date, silver is up 26 percent at over $17. The rise in silver prices is also crossing over to mining companies, which are also having a superb year thus far (SEE: A look at gold, silver stocks soaring as high as 17% Monday).
Can the precious metal continue this momentum? A new report suggests that if silver does then it could soon hit $20 an ounce.
According to Deutsche Bank, silver has enough momentum to reach as high as $20 in the near-term. The financial institution says that a dovish Federal Reserve, the continuation of the European Central Bank’s (ECB) quantitative easing and falling expectations of a United States central bank rate hike are all conditions for both gold and silver to maintain their upward trend.
Here is what Deutsche Bank analysts say:
“In our view, a near-term catalyst to drive gold higher is not obvious, but we think the metal remains well supported. The long – term gold silver ratio (since 1973) is 57.7. The more recent range is however 85 during the depths of the global financial crisis to 35 during the period of recovery and unprecedented Quantitative Easing. If gold stays relatively range bound at $1,250/oz, a silver rerating to 66.6 (the average 1983 – 2003), the silver could trade up to $18.8/oz, and a silver rerating to 61.1 (the average since 2003), then silver could trade as high as $20.5/oz.”
It’s been projected since the economic collapse that silver could eventually hit $100 per ounce because of rampant price inflation and erosion of the United States dollar.
@ $20 , that’s still undervalued. Gets to $35, then it’ll get attention……
I expect physical silver to be in the 100 dollar range within a year.
Gold and silver will be gaining on all fronts as the QE train is being continued (after FED, BOJ and ECB) – the war on cash will send gold up and up. http://independenttrader.org/war-on-cash-a-piece-of-a-bigger-puzzle.html
This appears to be linked to the relative decline in the U.S. dollar this year relative to other currencies, as the market has figured out that the Fed is unlikely to continue raising rates for long. Time will tell how long this global currency war will last. I don’t think silver will break out to new highs unless a systemic crisis arrives. However, the central bankers are taking a gamble here.
Never been a clearer signal that it’s time to short or get out – Nothing like herding them in before the slaughter !