Silver Prices: Indian Consumers Starting to Favor Silver Over Gold

London (Jan 4)  If you are looking for the next big trade, then pay close attention to silver prices. The gray precious metal could surprise investors with significant gains in 2018.

Amid all the noise about stock markets and Bitcoin, silver remains ignored. As this is happening, the fundamentals of the silver market continue to get much stronger.

Consider how India is building an appetite for silver. In fact, it’s starting to look like Indian consumers are favoring silver over gold. Don’t take this lightly whatsoever.

To provide some perspective, in November 2017, $189.69 million worth of silver was imported into the country. In the same period a year ago, this amount was $181.37 million. This represents an increase of 4.58% year-over-year. (Source: “Quick Estimates For Selected Major Commodities For November 2017,” India’s Ministry of Commerce and Industry, last accessed January 3, 2018.)

Here’s the thing: while the growth in silver imports may not that great, if you look back at the data, silver imports in the country have been nothing but stellar. In early parts of 2017, we saw triple-digit growth in silver imports into India. This “slow” growth rate could be because of new regulations the Indian government has placed on precious metals.

Mind you, in the same period, when silver imports in India grew by 4.58% in November, gold imports declined by close to 26% year-over-year. Looking back at the data, gold imports into India weren’t as strong as silver.

There’s one thing that must be remembered here: if Indian consumers start to like silver more than they like gold, this could mean massive demand for the gray precious metal, which could send silver prices soaring in no time.

Could There Be Global Growth Without Silver?

Beyond India, look at the global economy. These days, there’s a lot of buzz about how the global economy is improving, as well as about how major economies are going to report solid growth in coming years. We see the U.S. economy registering solid growth, Japan’s economy all of sudden not stagnating, and China just doing fine.

As this narrative prevails, we see industrial metals soar. Look at copper, for example; it’s soaring on this. In the last year, copper prices have jumped over 31%. Look at the chart below:

Chart Courtesy of StockCharts.com

If you look at other industrial metals, their performance has been very similar, if not better. But sadly, there’s one industrial metal that continues to lag: silver.

Don’t forget, silver has a huge industrial demand. It can’t be stressed enough: you can’t really have global growth without silver.

Silver Prices Outlook: 2018 Could Be Great for Silver Investors

Dear reader, with all this in mind, I will not be shocked if silver prices make a solid run towards $50.00 in 2018. I continue to see the gray precious metal as the next big trade.

There rarely is an instance where prices remain subdued and fundamentals improve. I see it happening in the silver market these days.

How long will the prices remain low? I can’t tell. But what I can see is that when investors realize how severely ignored silver is, we could be seeing them rushing towards the precious metal, and there could be a solid spike to the upside in a very short period.

Lombardi

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