2015 didn’t treat the precious metals market well, especially silver.
Bullion.Directory precious metals guest post 4 January, 2016
By Nick Adamo
President at Bullion Shark LLC
In 2015 silver hit multi-year lows but met astronomical demand – for example, 47,000,000 American Silver Eagles were sold in 2015, which is almost 3,000,000 more than in 2014.
There were even times when the United States Mint could not keep up with demand and was delayed for long periods of time. Other major mints also saw tremendous increases in demand, in particular for 1 oz silver coins.
Considering 47 million ounces of only one of the many silver bullion products out there were sold last year, the clear and undeniable fact of increasing demand is evident.
Silver also finished the year at near $14, which is extremely low for its respective demand. Another thing to take into consideration is that silver is increasingly being used in industrial and medical settings, causing demand to further increase. The Feds also increased interest rates in the United States. Contrary to public opinion, increased interest rates have historically been quite beneficial for the precious metals. Investors often flock to the metals when interest rates are higher.
One more interesting fact is that Russia and its allies are currently stockpiling gold. Since influential countries like these are increasing their demand, higher prices or possibly a shortage may result.
Now with demand at all time highs and prices at multi-year lows: what is to come in this New Year?
Assuming the Law of Supply and Demand takes precedent, silver prices theoretically should take huge upward strides.
First, the low prices should spark increased interest in silver bullion. Investors, who already buy silver bullion, will most likely buy more and many new investors may enter the market. These two actions are the very definition of increased demand, which should lead to higher prices.
Second, silver’s increased industrial and medical use may very well cause shortages, which lead to higher prices and premiums.
Third with historical evidence that arate hike is beneficial for the precious metals, silver should also increase in value.
With three factors that should theoretically put upwards pressure on the price of silver, it should be no surprise if prices for the shiny metals hit multi-year highs.
Although only time will tell what the precious metals will do, the evidence for a good 2016 is strong, and all we can do is hope that silver follows the path that it should.
2016 may be the time to buy silver.
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