Silver Soars 4% As Gold Consolidates On Dovish Fed

March 18, 2016

Silver rose 2% yesterday…and has surged 4% this week to over $16 per ounce as the Federal Reserve flip flopped regarding interest rates, lowering its expectations for rate rises this year from four back to two or just one rate rise due to “global risks.”

Silver in USD (1 Year)

Gold is flat for the week but has consolidated on the 19% gains year to date and looks well supported especially given the real risk of renewed global and economic financial turmoil. The factors which led to this turmoil remain intact and continue to bubble under the surface, largely unnoticed as similar factors did prior to the financial crisis in 2007/2008.

Increasing questions about the policies of, the credibility of and indeed the wisdom of major central banks such as the BOJ, ECB and the Federal Reserve is supportive of the precious metals.

The Fed signals and ECB actions were even more dovish than expected and confirmed, if any confirmation was necessary, that ultra-loose monetary policies are here to stay and may actually deepen.

Gold and silver are benefitting from this as ZIRP and NIRP (negative interest rates) are of course positive for non-negative yielding gold and silver.

Silver at $16 per ounce remains 1/78 of the price of gold at $1,250 per ounce showing what good value silver is relative to even depressed gold prices.

Silver remains less than a third of its nominal price high at over $49 per ounce in 1980 and again in 2011. Unlike, most other commodities and indeed assets which are multiples of their nominal price highs in the 1970s and 1980 due to the very significant inflation of the last 36 years.

GoldCore continues to believe that silver will surpass its non-inflation adjusted, nominal high at just below $50 per ounce in the coming years. Indeed, we believe that silver will surpass its inflation adjusted high or real record high of over $150 per ounce in the next 5 to 7 years as depressed silver plays catch up and reverts to the mean versus stocks, property and other assets.


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Mark O'Byrne is executive and research director of which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth. 

Silver has 47 protons and 61 neutrons