Bloomberg silver price survey Large majority bullish on silver
Silver median 12 month-forecast of $20
Precious metal analysts see silver24 percent rally from current levels
Investors are pouring money into silver ETFs
Speculativefunds bearish even as ETF assets rise to record
Spec funds being bearish is bullish as frequently signals bottom
Important to focus not just on silver price but on silver value
Important to note that all portfolios under all conditions actually perform better with exposure to gold and silver David Morgan (see video)
In a Bloomberg survey of 13 traders and analysts, the majority were bullish.11 people said silver prices would rise and two predicted declines.
Among the seven respondents that provided estimates, the median 12-month forecast was $20 – indicating a 24 percent rally from current levels.
Assets in exchange-trade funds backed by silver have risen 6.6 percent since April 24 to 21,211 tons, according to data compiled by Bloomberg.
In the same time, hedge funds turned negative as prices tumbled. In the week ended July 11, hedge funds were net short by 5,402 contracts, according to U.S. Commodity Futures Trading Commission data. Short positions have tripled since the week of April 25 to 60,775 contracts.
We continue to seesilver as undervaluedvis a vis gold but more especially vis a visstocks, bonds and many property markets. Rather than selling the financial insurance that is gold, we would advisereducing allocations to stocks, bonds and propertyand allocating to silver.
If one is very overweight gold in a portfolio and has no allocation to silver than there is of course a case for selling some gold andreweighting a portfolio in order to diversify into silver.
With thegold to silver ratio at 76 ($1235/$16.20/oz), the silver price isattractive at these levels and has the potential to be the surprise out performer in H2, 2017.
Silver’s industrial uses and coin and bar demand should see the gold/silver ratio graduallyrevert to the mean average in the last 100 hundred yearswhich is close to35:1. This was seen again inApril, 2011when the gold silver ratio fell to32.4with silver at $48/oz and gold at over $1,500/oz.
If the small silver market seeshigh net worth or institutional fundsenter it, then the ratio could return closer to the long term, historical average of15:1 as it did in 1980. We this as likely in the coming months given how cheap silver has become and the degree of risk in stock, bond and property markets today.
Silver prices back at$20 per ounce seems quite possiblein the coming months and we believe we will see a significant rally from today’s depressed prices.Longer term we see silver returning to the record nominal high of just below $50 per ounce which was seen in 1980 and came very close to again in April 2011.
Silver remains avaluable diversificationin a portfolio in that it tends to rise sharply when traditional assets like stocks and bonds are falling.
Historyshows this, as did therecent global financial crisiswhensilver surged from $12/oz(not far above the depressed levels of today at $16)in 2007to nearly$50 at the height of the crisis in 2011.
Recent researchhas confirmed this that bothgold and silver are safe haven assets. They tend to rise sharply when there is uncertainty and in economic crisis. Theresearch shows a10% allocation to gold is optimal and1% to 5% allocation to silver is optimalin normal market conditions but a10% allocation to silver is optimal in a financial crisis SeeLessons from gold and silver: Reviewing theresearch by Dr Brian Lucey.
In a recent note to subscribersDavid Morgan, the Silver Guru, underlined the importance of not viewing silver simply as a speculative asset to make a return on and tofocus on silver’s diversification benefit:
It is important to note that allportfolios under all conditions actually perform better with exposure to gold and silverDavid Morgan
We recently had the pleasure of David’s company in GoldCore’s head office in Dublin, Ireland.
In the short video above, Davidspeaks briefly about the importance of owningsilver bullion coinsand bars as financial insurance in an uncertain world. Hespeaks aboutGoldCore Secure Storageand how he recommends GoldCore’sultra secure allocated and segregatedgold, silver, platinum and palladiumbullion storage(Zurich, London, Singapore and Hong Kong) to his retail and high net worth clients.
Gold Prices (LBMA AM)
18 Jul: USD 1,237.10, GBP 949.47 & EUR 1,071.82 per ounce
17 Jul: USD 1,229.85, GBP 940.71 & EUR 1,074.03 per ounce
14 Jul: USD 1,218.95, GBP 940.54 & EUR 1,067.92 per ounce
13 Jul: USD 1,221.40, GBP 944.51 & EUR 1,071.05 per ounce
12 Jul: USD 1,219.40, GBP 947.60 & EUR 1,064.29 per ounce
11 Jul: USD 1,211.90, GBP 938.98 & EUR 1,063.68 per ounce
10 Jul: USD 1,207.55, GBP 938.63 & EUR 1,060.11 per ounce
Silver Prices (LBMA)
18 Jul: USD 16.17, GBP 12.41 & EUR 13.99 per ounce
17 Jul: USD 16.07, GBP 12.30 & EUR 14.02 per ounce
14 Jul: USD 15.71, GBP 12.11 & EUR 13.76 per ounce
13 Jul: USD 15.95, GBP 12.34 & EUR 14.00 per ounce
12 Jul: USD 15.83, GBP 12.31 & EUR 13.82 per ounce
11 Jul: USD 15.51, GBP 12.02 & EUR 13.61 per ounce
10 Jul: USD 15.22, GBP 11.82 & EUR 13.36 per ounce
Recent Market Updates
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