Silver Prices Poised for Aggressive Move Higher
As gold prices continue to break records, silver is also experiencing a significant rally. According to Peter Spina, president and founder of GoldSeek.com, silver has all the ingredients for a “melt-up move” that could push prices to $40 an ounce or more by the end of the year.
Supply Deficits Drive Price Growth
The Silver Institute forecasts a global silver supply deficit of over 215 million ounces in 2024, following deficits in 2021, 2022, and 2023. This shortage is driving up prices, with silver futures climbing 2% to $33.895 an ounce on Comex. Based on the most active contract, prices are poised for their highest settlement since November 2012.
Investor Interest Grows
Spina notes that silver is making a major move and will likely attract more investors and speculators. This increased interest could lead to an aggressive move higher in silver prices, with $40-plus an ounce on the horizon. The climb in gold prices has taken center stage, but Spina believes that silver will follow suit, driven by its own supply and demand fundamentals.
Miners Present a Buying Opportunity
Spina also highlights the potential for gold and silver miners, citing their lagging share prices and exploding profit margins. He believes that the sector has gone unnoticed, presenting a “screaming buy” opportunity for investors. The Philadelphia Gold and Silver Index has climbed over 30% this year, indicating a growing interest in precious metals mining companies.
Aggressive Catch-Up Period Ahead
The relative lag in silver prices and related stocks means that an aggressive catch-up period is starting. Spina expects gains to come in “viciously fast” as years of frustration flip quickly. The gold-silver ratio is crumbling, and silver prices are breaking through key resistance levels, signaling the start of a melt-up stage.
Monetary Interest Drives Price Growth
Spina attributes the run-up in silver prices to monetary interest rather than economic prospects. Investors are recognizing the four-year structural supply deficit for silver, which will not resolve itself without higher prices. While volatility will be high, and sharp pullbacks can be expected, the lower $30s look like a solid support floor for prices.
Conclusion
Silver prices are poised for an aggressive move higher, driven by supply deficits, growing investor interest, and monetary factors. With gold prices leading the way, silver is likely to follow suit, presenting opportunities for investors in the precious metals space.
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