Silver stagnation seen continuing in 2018
Silver prices will continue to stagnate in 2018 before rising significantly on the back of global economic turmoil, according to CPM Group.
Silver was largely range-bound in 2017, trading mainly at US$16-18/oz, with a further narrowing around the US$17/oz level to date in 2018.
This flat trend will continue for at least the bulk of this year and maybe into 2019, managing partner Jeffrey Christian said at the launch of the CPM Group Silver Yearbook 2018 report.
Prices are being held back by weak investment demand, with net investor buying falling by more than 50% last year to 50Moz and a further drop to 44Moz expected in 2018, according to CPM Group.
Meanwhile a 23% increase in silver use in solar panel production last year to 106Moz helped prop up fabrication demand for the metal, which stood at 927Moz.
Total fabrication demand is expected to rise to 934Moz in 2018, according to CPM Group, partly due to higher consumption in the solar panel, jewelry and consumer electronics sectors.
"CPM Group's expectation is that the price of silver will continue to move sideways at least for most of this year," Christian said.
"We believe the price will rise sharply at some point but in 2018 we are looking at more of the same, with prices possibly starting to rise in Q4 before rising more forcefully in 2019."
The company expects average annual prices to rise about 10% next year, followed by much higher prices over the coming 5-10 years, Christian said.
The timing of price rises will depend on the global economic, financial and political environment, which affects investment demand.
"You can see a lot of clouds on the horizon, but in the near term the economy and global financial markets are doing relatively well," Christian told the event.
"Our expectation is that it will take some more time for economic and financial problems to become problematic enough to cause investors to start buying silver in larger volumes."
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