Technical Analisys
We've got a really nice confluence to enter "one in a lifetime" longs in Silver for the next 3-5 years where the bubble might pop around 50$ in 2023/4 and then fall hard to get their 8YCL on 2025
- Intermediate Trendline from May19 will make Support
- 200 DMA + 200 WMA
- Bullish Falling Wedge pattern
- 61.8% Fib Retracement
But.. hey!! Let’s go to 26$ first ;)
Fundamentals
Three Catalysts for Silver Prices to Rise
1. No Growth In Silver Supplies
According to the U.S. Geological Survey, America only produced 470,000 oz of silver in the first five months of 2017. A year ago, it was 482,000 oz. Lower supplies aren’t just an American anomaly; it’s happening throughout the world.
Total silver supply decreased by 32.6 million ounces in 2016, led by a 11% drop in demand. Perhaps shockingly, Mexico registered the largest decline in production last year, followed by Australia and Argentina. Mexico is traditionally the largest silver producer in the world. (Source: “Global silver output falls for first time in 14 years,” Mining.com, May 11. 2017).
2. Technological Demand
The winds of change regarding industrial silver demand are blowing. Industrial demand is falling in some traditionally strong areas, like electronic appliances (miniaturization) and photography (shift to digital). This has certainly hampered the demand curve in a significant way.
But new industries are emerging that could ramp up demand to a higher plateau.
Purchases from the photovoltaic industry jumped 34% in 2016, driven by a 49% increase in solar panel installations. The amount of silver consumed totaled 76.6 million ounces, which was the highest amount since 2010. The number of global solar panel installations increased exponentially as well. Driven largely Chinese and American growth, installations climbed 126% and 95%, respectively. (Source: Ibid).
Whether the increase in new tech can fully make up for the losses in traditional industrial silver demand remains to be seen. The photovoltaic industry, while not new, still offers plenty of mainstream adoption upside.
3. Increasing Investment Demand
Retail investment demand has played a huge part in silver’s run from $10.00/oz to $50.00/oz since the U.S. Housing Bubble. Back then, the U.S. Mint was regularly selling out of silver eagle coins, and shipments from bullion dealers were delayed for weeks on end. Retail investors couldn’t get enough. The massive stimulus and balance sheet expansion undertaken by the Federal Reserve spooked investors and sent the U.S. dollar lower.
Via: lombardiletter
Working on the following three assumptions, I expect silver prices to soar.
1. a recession/slowed economy will have come by 2020,
2. stimulus measures undertaken by the U.S. government and the Federal Reserve will match or exceed those undertaken post-U.S. Housing Bubble, and
3. technological demand will fill or exceed the gap left by losses in traditional industrial demand.
We've got a really nice confluence to enter "one in a lifetime" longs in Silver for the next 3-5 years where the bubble might pop around 50$ in 2023/4 and then fall hard to get their 8YCL on 2025
- Intermediate Trendline from May19 will make Support
- 200 DMA + 200 WMA
- Bullish Falling Wedge pattern
- 61.8% Fib Retracement
But.. hey!! Let’s go to 26$ first ;)
Fundamentals
Three Catalysts for Silver Prices to Rise
1. No Growth In Silver Supplies
According to the U.S. Geological Survey, America only produced 470,000 oz of silver in the first five months of 2017. A year ago, it was 482,000 oz. Lower supplies aren’t just an American anomaly; it’s happening throughout the world.
Total silver supply decreased by 32.6 million ounces in 2016, led by a 11% drop in demand. Perhaps shockingly, Mexico registered the largest decline in production last year, followed by Australia and Argentina. Mexico is traditionally the largest silver producer in the world. (Source: “Global silver output falls for first time in 14 years,” Mining.com, May 11. 2017).
2. Technological Demand
The winds of change regarding industrial silver demand are blowing. Industrial demand is falling in some traditionally strong areas, like electronic appliances (miniaturization) and photography (shift to digital). This has certainly hampered the demand curve in a significant way.
But new industries are emerging that could ramp up demand to a higher plateau.
Purchases from the photovoltaic industry jumped 34% in 2016, driven by a 49% increase in solar panel installations. The amount of silver consumed totaled 76.6 million ounces, which was the highest amount since 2010. The number of global solar panel installations increased exponentially as well. Driven largely Chinese and American growth, installations climbed 126% and 95%, respectively. (Source: Ibid).
Whether the increase in new tech can fully make up for the losses in traditional industrial silver demand remains to be seen. The photovoltaic industry, while not new, still offers plenty of mainstream adoption upside.
3. Increasing Investment Demand
Retail investment demand has played a huge part in silver’s run from $10.00/oz to $50.00/oz since the U.S. Housing Bubble. Back then, the U.S. Mint was regularly selling out of silver eagle coins, and shipments from bullion dealers were delayed for weeks on end. Retail investors couldn’t get enough. The massive stimulus and balance sheet expansion undertaken by the Federal Reserve spooked investors and sent the U.S. dollar lower.
Via: lombardiletter
Working on the following three assumptions, I expect silver prices to soar.
1. a recession/slowed economy will have come by 2020,
2. stimulus measures undertaken by the U.S. government and the Federal Reserve will match or exceed those undertaken post-U.S. Housing Bubble, and
3. technological demand will fill or exceed the gap left by losses in traditional industrial demand.
Comment:
Monthly Chart
