“The silver market is telling two completely different stories right now,” said Jeremy Szafron, the lead anchor at Kitco News, regarding the precious metal’s relationship with the broader U.S. economy last week.
On the one hand, silver futures were pulling back to the $41 mark, while on the other, real bars and coins were showing signs of a deep and persistent supply deficit.
Now, a week later, on September 12, silver has hit its highest closing price in 14 years, trading above $42.20 at the same time as gold has come back above $3,650.
A number of investors are accordingly weighing in on what appears to be the beginning of a new shift in investor psychology and a potential first step toward a silver price of $50 per ounce alluded to by Phil Baker, the former Chairman of The Silver Institute and Szafron’s guest last week.
When will silver hit $50?
Following four years of deficits, an unprecedented turn of events for the metal, Baker pointed to a generational shift in investor behavior.
In the interview, he noted that global demand is running at 1.2 billion ounces annually, while mine supply covers only about 800 million, and recycling contributes an extra 150 million.
One important change, however, is that heirs are no longer liquidating inherited silver, transforming it into a long-term generational asset.
Similarly, retirement accounts show the same pattern, as investors are not only holding silver but also continuously adding to their positions.
On the supply side, Baker argues the world has already passed “peak silver” in 2016. With small mines and no ability to scale production, the squeeze will likely culminate in a sharp repricing, allowing silver to outperform gold and trade above $50.
‘Panic buying will ensue,’ claims analyst
Looking at the current prices, Peter Schiff, an American stockbroker and financial commentator, claimed on Friday, September 12, that while certainly high now, the prices would look ‘ridiculously low’ next year.
In fact, the reason why prices are not already much higher than they are, Schiff says, is that ‘most people don’t see what’s coming.’ When they do finally figure it out, ‘panic buying will ensue.’
Safe-haven demand for silver has also strengthened amid persistent geopolitical tensions, and robust demand from solar, electric vehicle (EV), and electronics sectors also continues to tighten the physical market, which remains constrained by ongoing supply shortages.
Are precious metals really about to ‘melt up’ as Schiff warns?
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Source: https://finbold.com/analyst-sets-date-when-silver-will-hit-50/
