The Silver Institute recently hosted its annual Interim Silver Market Review and their Highlights included:
• The most significant development in the silver investment market this year has been the strength of silver-backed exchange-traded product (ETPs) demand. Investment in silver-backed ETPs surpassed 1 billion ounces, for the first time, achieving a record high of 1.062 billion ounces. For the full year, Metals Focus forecasts an increase of 350 Moz. on end-2019 levels, compared with last year’s rise of 81.7 million ounces (Moz).
• Physical investment is expected to surge by 27 percent to 236.8 Moz. in 2020, which would be a 5-year high.
• The largest retail market for silver bullion bars and coins was the US with a projected 62 percent gain.
• The silver price has risen strongly, achieving an intra-year gain (through November 13) of 38 percent, as the pandemic has led to a surge in safe-haven demand. In terms of the full-year average, Metals Focus expects the silver price to rise by 27 percent year-over-year to an average US$20.60. This would represent the highest annual average since 2013.
• Because of COVID-19 related lockdowns by several major producers, especially in Mexico, Peru and China, silver mine production is expected to fall by 6.3 percent in 2020 to 780.1 Moz. Most mines have returned to full production, but localized outbreaks leading to lockdowns could occur.
The Austin Report Conclusions
It has been an extraordinary year in every way with the Coronavirus Pandemic creating wild volatility in the markets and then being stabilized by the Federal Reserve’s market intervention.
As we write, it appears Silver is making a late year breakout crossing $26 an ounce and Gold is trying to clear $1,900 an ounce, again. We continue to feel Silver under $30 will prove to be a bargain in 2021. We also like Gold under $2,000. But, we will remind readers that every time Gold has hit strategic “round numbers” like $500, $1,000, $1,500, and especially the $2,000 levels— it always take some time to break out.
But when it does, the shorts run for the hills and we enjoy a big pop.