Welcome to illuminati silver, we tell you the truth about silver.
Today is Monday 6th August 2018 and this is the second part of 2 videos where we highlight
what we believe will be the influences on the Silver price for the remainder of 2018
and where we assess prices will end up before the year ends.
In our last video we highlighted the potential effects on silver prices which included:
1.
Geopolitical issues 2.
Interest rates 3.
Price manipulation 4.
Traditional Supply and Demand.
5.
Internal US Politics.
We also pointed out that so far this year with silver standing at $15.42 an ounce it
is some 8% down on exactly a year ago and down some 9.5% or $1.64 down since the start
of 2018.
So Are silver prices going to go up in 2018?
Well before we directly answer that, we wish to draw your attention to a poll conducted
by Focus Economics whose panellists could see prices increasing in 2018, but not by
a lot.
As a whole, they expect prices to average $17.50 this year, which is higher than the
metal’s current level but still far from what silver investors have been hoping and
waiting for.
Here’s a list of the average 2018 silver predictions given by some of the respondents:
Capital Economics — $16.30 per ounce CIBC — $18.10 per ounce
Deutsche Bank— $17.60 per ounce JPMorgan — $18.70 per ounce
RBC Capital Markets — $19.40 per ounce Standard Chartered — $18.90 per ounce
Now all of these vary significantly with the statements by the likes of Keith Neumeyer,
President and CEO of First Majestic Silver who recently said he believes “we’ll see
silver prices rise to $130” and the likes of Bix Weir who has argued the case for $100,000
silver any time soon – both of whom have been way out for many years.
Even David Morgan the so-called silver guru who has been far too bullish on silver almost
since time began – sorry we are being hyperbolic here – has been wrong for many years – for
example on just 10th September 2017 on Palisaderadio.com he predicted that gold will reach $5,000 and
silver $100 dollars in 2018 / 2019.
But even he more recently has given other interviews, although stating he is expecting
a sharp rise, has not been quoting these figures again – we just get the feeling that he
and others seem to either deliberately pump their forecasts or amend them to take account
of the audience they are addressing – all of which is unfortunate and to think that
he is one of the moderates.
So these people apart, Many industry insiders predict that silver will stay the course for
the third quarter this year, eventually beginning its slow climb as markets enter into the fourth
quarter.
Analysts at Scotiabank recently stated that, “going forward, we expect that recuperating
physical bar demand and rising industrial consumption will help tighten markets and
push speculators, who remain net short silver, out of the market”…
And that “silver prices are expected to average US$18 per ounce this year and rise
to US$19 per ounce in 2019 on the dual precious/industrial nature of its demand base.”
The most bullish forecast for the quarter comes from both Société Générale and ANZ
which are calling for a price of US $18.80; meanwhile, ABN AMRO is the most bearish with
a forecast of US$16.00.
So accepting we have no crystal ball our analysis shows that silver at $15.50 is sustainable
in terms of quantities being mined especially when compared with most of the major producers
declaring an average AISC of production of around $11.50/ounce in 2017
Now on the basis of fairness, a few have announced rising AISC, for example Endeavour Silver
has had a huge increase in AISC from $14/ounce to $17.50/ounce in Q3 2017 but this was due
to production problems at its Guanacevi mine where lightning struck and disabled their
electrical substation.
This was repaired in July 2017 and should improve their costs now.
In comparison, Fortuna Silver Mines, a pretty large player in the silver space, have pretty
low AISC’s at $8/ounce.
It is a profitable company and has a large cash balance.
With approximately 30% of silver being produced or mined by pure silver mines (which tend
to have the higher AISC’s and 70% mined as a by-product of some other precious metal
e.g. gold (which tend to have lower AISC for silver extraction), we can see that there
is very limited pressure for these mines with one or two exceptions to raise their prices
against a backdrop of silver even at $15.50 an ounce.
So going back to our analysis.
On pure supply and demand terms where we continue to assume that 60% of demand remains for Industrial
purposes we see no reason why silver should not be able to vacillate between a low of
$14.50 an ounce and $16.50 an ounce.
However, bearing in mind the other factors which can affect price, it would not take
a great deal of turmoil either for example by a military incursion, trade tariffs proving
damning or a major upset within the Trump administration to see the dollar value falling,
stock markets taking a correction and monies flow from equities and currencies into gold
and silver.
In that scenario we could very well see silver reach $18 - $19 again before the year is out.
If we were asked to take a punt today, and with our view that the economy will continue
to move positively forward a while longer, we feel that the FED will again raise interest
rates, and the stock markets will rise further thereby pressurising silver prices downwards
However like many of the people we have mentioned we do see this reversing towards the final
quarter of this year which is only a couple of months away.
So we are of the opinion that silver will rest at or around the $16.50 - $17 level by
December end having fallen no lower than $14 and risen no higher than $18 in between, even
allowing for the US elections in November.
Of course we could be wrong but we suspect we shall be more accurate by far than the
likes of Dent predicting sub $10 silver and Mike Maloney and David Morgan predicting $100
silver.
Are silver prices going up this year?
What do you think?
What key indicators do you look for?
Do share your thoughts here we shall be happy to obtain your perspective.
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Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics.
Having now retired from these worlds we are not qualified to give investment advice.
Therefore, this and other productions must not be deemed to be giving such advice and
merely represent the personal views of its owners.