2018 Silver Market Trends
By GCRU Gold News on Thursday, January 18 2018, 23:59 - Permalink
Silver Market Balance
The silver market balance (total supply less total demand) is expected swing into a slight market deficit again this year with both supply and demand reaching above 1 billion ounces. Silver from above ground stocks will have to be drawn down in order to serve the shortfall. That will be a welcome development as above ground stocks rose 9% last year in the face of weak physical demand from the United States and Asia.
The silver price fell by just half a percent last year to an average of $17.05/oz. This year we expect the silver price to experience a volatile ride. Short covering in the beginning of the year has already propelled the price above last year’s average. On a ratio with gold, currently at around 72, silver has plenty of room for improvement and to migrate towards its long-term average of around 64. With physical gold investment likely to be robust via risk-hedging, silver should benefit by proxy, given the propensity of professional speculators to leverage gold exposure through silver, and retail investors to buy silver instead of gold if they cannot afford the latter.