Industrial Metals Getting Investors’ Attention, Silver Prices Remain Ignored
Silver prices are severely ignored these days. Mark my words, the gray precious metal could reward big-time.
You see, there’s something interesting happening these days, and no one is talking about it.
If you look at metals for industrial use, you’ll see that they are getting a lot of attention. For example, look at copper. Year-to-date, the price of the red metal has increased over 27%. It currently sits at its highest level since 2014.
Copper isn’t the only industrial metal witnessing a robust move to the upside, however.
Aluminum prices are soaring as well; they’re testing the 2014 highs.
Zinc prices are ripping higher too. This metal now trades at around $1.50 a pound. In mid-2015, it traded at around $0.65 a pound. This represents an increase of more than 130% in little over two years.
Palladium has shown a stellar performance as well. It traded as low as $450.00 an ounce in early 2016. Now it trades at around $950.00 an ounce. This represents an increase of over 111% in less than two years.
Now, coming back to silver prices. Year-to-date, the gray precious metal has increased by only 7.5%. If you look at its performance since mid-2015, you’ll see that it’s relatively flat.
Here’s the thing that a lot of investors forget: even though silver is considered a precious metal, it has a huge industrial demand as well.
To give you some perspective, consider this: over 50% of silver is consumed for industrial use. The metal is used in electronics, solar cells, as a chemical catalyst, and much more. In 2016, global silver demand was 1.027 billion ounces. Well over 500 million ounces of that was for industrial use. (Source: “Silver Demand,” The Silver Institute, last accessed October 20, 2017.)
Why Silver Prices Could Make a Run Toward $50.00 in the Next Year
Looking at all this, it must be asked: Why isn’t silver getting as much attention as the other industrial metals?
It wouldn’t astonish me if investors wake up one day and start buying silver again after ignoring it. To me, the greatest indication of this would be when the correlation between gold and silver prices goes haywire—meaning, you’d see gold prices remaining flat but silver prices jumping higher. It would indicate that silver is not being looked at as just a precious metal.
Dear reader, I reiterate, ignoring silver prices could be a big mistake. I see the metal to be one of the best opportunities out there.
How high could silver prices go? I am not big into predicting the exact prices, but, in next year, I wouldn’t be shocked if silver makes a solid run toward $50.00.
With this said, I am also paying a lot of attention to silver mining companies. There are very few quality mining companies that are focused on silver only. If the price moves higher, silver mining companies could be in very high demand all of sudden, and they could provide leveraged gains to silver prices.
I will make another bold statement here: I will not be surprised if silver mining stocks reach their 2011 highs before silver prices do.