Canadian financial services provider TD Securities believes that the continued increase in demand for silver will lead to a sharp rise in prices next year.
2018 has been a rough ride for silver, with the strong US Dollar, rising global interest rates, a weak Chinese Yuan, and other hinderances from the trade war keeping prices down. The bear market for the grey metal has now been going since its huge peak in 2011, but Bart Melek, Head of Commodity Strategy, told Kitco News they see change on the horizon.
“Right now, we think the market is underpricing silver’s potential” Melek said. “We don’t see global economy collapsing next year. We see the global economy growing 3.5 percent and that should lead to higher demand for silver. You can’t get too negative on silver when you see higher demand and flat primary supplies. We are certainly not seeing new silver production or infrastructure coming online any time soon.”
Silver is currently at $14.68 per ounce (£11.16) but TD Securities expect it to push up to around $17 per ounce by the end of 2019 as economies continue to grow. Gold too is being forecast to gain value – which traditionally helps pull silver prices up in its slipstream – due to the expectation that equity prices will weaken having reached highs this year.