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« Interesting Silver Debate: Do Old Indicators Matter Or Is Physical About To Overrun Paper? | Main | Autotrading now available for non-US residents! »
Tuesday
Apr262016

Silver Plays Catch-Up To Gold, 2016 Could be "Pivotal" Year: CPM Group

By Daniela Cambone of Kitco News

(Kitco News) - This could be a pivotal year for silver prices, this according to one research firm which launched its coveted silver year book on Tuesday.

New York based research firm, CPM Group’s Silver Yearbook 2016, suggests that silver prices may see stronger support as fundamentals seem to be lined up in the metal’s favor.  “Prices are forecast to benefit from slowing mine supply, modestly rising fabrication demand, and ongoing strength in investment demand,” the firm stated.

However, silver’s rally could be limited in the near-term as CPM Group expects the metal to trade in a range between $14.60 and $18 for the year.

The price of silver has rallied over the last few weeks. Gold is now around 75 times that of silver, down from 83 times higher back in March. Typically silver prices track gold prices, but the past year has seen an unusual pattern, with silver trailing behind gold. But things are now turning around for silver; the metal is up 22% since the start of the year and currently trading at 16.940 an ounce.

CPM’s yearbook said that silver market investors remained net buyers of historically large volumes of the metal in 2015 and are expected to continue showing up this year. “Longer-term investors have been the primary buyers of silver in recent years, with shorter-term investors staying on the sidelines or outright building short positions,” they said, adding that silver coin sales in the United States, Canada, and Australia are reaching record high levels.

The firm stressed that for silver investment demand to find solid support, the metal will need help from both short and long-term investors. “[I]t needs a combination of both longer term and shorter term investors to push silver investment demand higher on a sustained basis. Shorter-term investors may need some serious jolt to drive them back to the silver market in a meaningful way,” CPM said.

 

With the RSI standing at 76 silver is firmly in the overbought zone.

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