{"id":644013,"date":"2018-03-05T14:58:29","date_gmt":"2018-03-05T14:58:29","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=644013"},"modified":"2018-03-05T14:58:29","modified_gmt":"2018-03-05T14:58:29","slug":"silver-trails-gold-by-the-biggest-margin-in-25-years","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=644013","title":{"rendered":"Silver Trails Gold by the Biggest Margin in 25 Years"},"content":{"rendered":"
\n
\n
\n
\n
\n

\nBy Myra P. Saefong<\/div>\n

\n
\n
\n
<\/div>\n
\n
\n
<\/div>\n
\n
\n
\n
\"Silver<\/div>\n
PHOTO:\u00a0<\/span>GETTY IMAGES<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n
<\/div>\n

Bloomberg Commodity Index<\/a><\/p>\n

Silver didn\u2019t get the push it needed to outpace the rise in gold last year, as some analysts had expected, but good things come to those who wait.<\/p>\n

\n

\u201cMany of silver\u2019s key drivers that painted a bullish picture last year are still in play for 2018, particularly rising inflationary pressures and a weaker U.S. dollar,\u201d says Maxwell Gold, director of investment strategy at ETF Securities.<\/p>\n

Even so, silver futures have lost roughly 5% so far this year as of Friday, trailing gold\u2019s 0.3% decline. In 2017, gold gained nearly 14%\u2014roughly double the rise for silver. Silver closed on Friday at $16.54 an ounce.<\/p>\n

Brien Lundin, editor of Gold Newsletter, says he expected silver to top gold last year and this year, but that hasn\u2019t happened because the rally in gold hasn\u2019t had \u201cthe kind of consistency\u2026necessary to lead investors to look to silver for additional leverage.\u201d<\/p>\n

\n
\n
\"Silver<\/div>\n
<\/div>\n<\/div>\n<\/div>\n

That will come, he says, given his expectation for further declines in the U.S. dollar on the back of \u201crecent signs of rising inflation and the fact that we\u2019re in the back half of the [Federal Reserve\u2019s] tightening cycle.\u201d Other central banks look poised to begin tightening monetary policy, he says. A weaker dollar will translate into \u201cupward pressure on gold and, eventually, as this trend becomes apparent, greater gains for silver,\u201d says Lundin.<\/p>\n

Demand will also play a big part in silver\u2019s climb.<\/p>\n

\"\"<\/a><\/p>\n

\u201cSilver demand from industrial applications is expected to grow mainly from [electric vehicle] and photovoltaic applications, as silver has excellent electrical conductivity properties,\u201d says Will Rhind, chief executive officer of exchange-traded fund company GraniteShares. Photovoltaic panels collect solar energy. \u201cWith continued global economic growth, continued EV demand and a weakening dollar, silver has the potential to perform well in 2018 and potentially outperform gold,\u201d he says.<\/p>\n

A report from the Silver Institute released in January shows that demand for the white metal from industrial applications is the largest component for silver offtake, representing 60% last year, and it\u2019s expected to continue to grow this year. Worldwide silver demand for photovoltaic applications, particularly in solar panels, reached an estimated 92 million ounces in 2017.<\/p>\n

\u201cWe expect the growth to continue this year and set another record for silver demand, driven by large-scale solar capacity additions and continued strong demand uptake from individual households, particularly in China,\u201d the report says.<\/p>\n

Analysts also point out that the gold-to-silver price ratio, which measures the amount of silver ounces that can be exchanged for one ounce of gold, is historically high, suggesting a bargain in silver.<\/p>\n

<\/div>\n

SILVER \u201cREMAINS RELATIVELY CHEAP<\/strong>\u00a0compared with gold,\u201d with the gold-to-silver ratio at about 80, versus a historical average of 60, says ETF Securities\u2019 Gold. \u201cSilver may play catch-up, spurred by bargain buying among retail and ETF investors.\u201d The silver bullion-backed\u00a0iShares Silver Trust<\/a>\u00a0ETF (ticker: SLV) has lost nearly 3% year to date.<\/p>\n

Adrian Ash, director of research at BullionVault, says that silver\u2019s \u201cfailure to rise with gold so far in 2018 means that silver is touching extreme levels, in terms of the yellow precious metal.\u201d The gold-to-silver ratio makes \u201cgold very nearly as expensive as it has been any time in the past 25 years,\u201d he says.<\/p>\n

He also points out that over the past 50 years, silver and gold prices have gone in the same direction on 71% of all trading days and the two metals have moved in the same direction in 74% of the months since 1968. Given that, \u201cif you\u2019re bullish on gold, history says you should expect silver to rise, too,\u201d says Ash.<\/p>\n

And even after last year\u2019s disappointing performance for silver, Lundin believes that prices will climb above $18 an ounce this year and \u201cperhaps significantly higher.\u201d<\/p>\n

That said, he also warns of a possible dip to the mid-$15 range, particularly if the 10-year Treasury yield hits 3%. \u201cBreaking that benchmark would likely lead to short-term havoc in risk assets, leading investors to sell the metals to meet margin calls,\u201d Lundin says.<\/p>\n

MYRA P. SAEFONG covers commodities for MarketWatch.<\/p>\n

Email:\u00a0<\/strong>editors@barrons.com
\n<\/a><\/p>\n

<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By Myra P. Saefong March 3, 2018 PHOTO:\u00a0GETTY IMAGES Bloomberg Commodity Index Silver didn\u2019t get the push it needed to outpace the rise in gold last year, as some analysts had expected, but good things come to those who wait. \u201cMany of silver\u2019s key drivers that painted a bullish picture last year are still in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[352,153,138,137,48,102,135,338,115],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/644013"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=644013"}],"version-history":[{"count":2,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/644013\/revisions"}],"predecessor-version":[{"id":644015,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/644013\/revisions\/644015"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=644013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=644013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=644013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}