Analysts See Silver Rebounding in 2014
London (Mar 10) When equity traders tire of the roller coaster ride their money is taking on the stock market, they look to precious metals as an alternative investment. Silver has gained a larger share of the commodities markets and although not as exciting as gold, silver has become a popular choice for traders as well as collectors.
In its 2014 silver outlook released at the end of December, Silver Investing News (SIN) reported that most analysts are seeing the white metal selling for about $21 per ounce by the end of 2014. Both Moody’s Investors Service and Sharps Pixley have forecasted similar results. Silver already surpassed this predication when it traded at $21.43 just this week on March 3rd.
There are silver market watchers, however, who believe the metal will show ever increasing strength in 2014 and will continue to reach even more impressive heights. For this to happen, several dynamics must transpire, some of which have already been put in place.
Silver mines that are not profitable in today’s environment will collapse, causing a decrease in the amount of silver in the market. This diminished supply will act to push prices up.
Since 2013 has ended on a tremendous high, analysts are calling for a correction of some kind in 2014. Since silver is currently undervalued, it and gold will be the commodities that investors will look to. Silver is in an oversold position and it should be followed by a strong movement upwards.
The U.S. bond-buying program will shrink by $10 billion to $75 billion a month. The Federal Reserve has already announced plans to do so by the end of the year.
Demand for both silver and gold is already being felt from Asian countries, primarily from India, which has been importing large quantities of the metal and will continue to do so. In a recent report released by Reuters, silver imports in India jumped 40% in one month from September to October 2013. India is expected to purchase 22% of the world’s silver production and 44% of investment silver this year alone. If demand from India and other Asian locations continues at the same pace, silver prices can only go in one direction.
There are no guarantees in investing and as the last year has proven, predictions of silver prices can easily stray from their course. Analysts are confident, however, that this year will be a strong one for metals and are placing bets that this year silver will shine.