Silver is a particular kind of precious metal. Not like gold, just about 60 percent of silver demand comes from industry. That's because silver has great physical properties despite the fact that being much cheaper per ounce than gold. Silver is essential to the electronics and solar industry, and new applications are being revealed on a just about daily basis. Persistent innovation is leading to new uses for silver such as water purification and anti-bacterial application.
Even though the jewelry and industrial segments have been more predictable, it's the demand for silver from the investment zone, in the form of bars and coins, that's the wild card. We think 2019 could be a stellar year for silver prices as a confluence of catalysts come together. That could ignite a strong rally as the silver price relics very cheap on both an insignificant and relative basis.
On the other hand, despite the precious metals lackluster performance this previous year, there is still some optimism in the market that silver could see a reversal of fortunes and leave behind next year, specifically if gold prices turn around. A potential turn around comes after silver dramatically underperformed gold prices, with the gold-silver ratio holding near a 25-year high. The ratio currently trading at 84.74 points and the historical average for the ratio is around 50.
The renewed optimism for silver comes as prices look to end the year down more than 13 percent. According to commodity analysts, the precious metal, which has significant industrial usage, was dragged down by weak base metals, in particular, copper which fell dramatically from a nearly four-year high in early June.
This message was edited 1 time. Last update was at 12/04/2019 11:09:53