10
Mar
2016

Silver Cheapest To Gold In 7 Years – ETF Holdings Surge

Silver hasn’t been so cheap relative to gold for more than seven years and with silver ETF holdings having surged in recent days, silver coin and bar demand very robust and mine supplies forecast to contract this year, there are signs that silver is set to resume its bull market and outperform gold once again.

silver gold ratio

Eddie Van Der Walt and Ranjeetha Pakiam write in Bloomberg today:

Mine production of silver will probably drop in 2016 for the first time in over a decade and demand is set to outstrip supply for a fourth straight year, says Standard Chartered Plc. Much of the world’s silver is extracted from the ground with other minerals, and output cuts announced by the biggest miners will hurt supplies of the metal as well as others such as copper and zinc.

Silver’s 10 percent advance this year has trailed gold’s 18 percent surge as financial turmoil and worries about a global slowdown sent investors flocking to the yellow metal as a haven. An ounce of gold bought about 83 ounces of silver last month, more than any time since the financial crisis of 2008. That’s a signal to some that it’s relatively undervalued and will narrow the gap.

silver_ETF_holdings

More than 50 percent of demand comes from industry, including about a quarter from electronics, and to some extent silver’s fortunes follow those of industrial raw materials such copper, zinc and lead. The London Metal Exchange index of six metals has climbed about 14 percent since slumping to the lowest level in more than six years in January.

Silver may climb about 18 percent to about $18 an ounce by the end of 2017, according to Julian Jessop, head of commodities research at Capital Economics Ltd. in London. Assuming the world economy avoids a sharp downturn and prices of industrial metals continue to recover, he predicts that silver will outperform gold and the ratio could return to 70.

Read full article on Bloomberg here

LBMA Gold Prices
10 Mar: USD 1,247.25, EUR 1,137.04 and GBP 876.67 per ounce
09 Mar: USD 1,258.25, EUR 1,146.69  and GBP 884.16 per ounce
08 Mar: USD 1,274.10, EUR 1,155.69 and GBP 894.35 per ounce
07 Mar: USD 1,267.60, EUR 1,156.96 and GBP 896.13 per ounce
04 Mar: USD 1,271.50, EUR 1,158.67  and GBP 898.93 per ounce

Gold News and Commentary

Gold prices dip further in Asia as China CPI data higher than expected – Investing.com

Gold dips as stocks, dollar strengthen ahead of ECB meeting – Reuters

U.S. Stocks Gain With Commodities as Euro Fluctuates Before ECB – Bloomberg

Jewelers in India Losing $150 Million a Day as Strike Continues – Bloomberg

Indian government calls meeting on gold monetization scheme’s lack of success – Business Standard

If Gold Has Turned Bullish, Can Silver Be Far Behind? – Seeking Alpha

Gold looks overbought – but it just keeps going up – Frisby – Money Week

82-year old argument for gold at $8,000 per ounce – MW via YouTube

Global Leading Indicators Fall Sharply Into 2016 – Financial Sense

China’s Global Gold Strategy – Middelkoop – Epoch Times

Read more here

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