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Profit Confidential (www.ProfitConfidential.com) an e-letter of Lombardi Publishing Corporation, a 30-year-old consumer publisher that has served over one million customers in 141 countries, is commenting on silver prices and explains why increased demand from consumers could send silver prices soaring.“Silver is one of the best performing assets of 2016, up approximately 12% since the beginning of January. While silver remains bullish with tremendous upside potential, many investors are discouraged at the recent fluctuations in silver prices,” says Moe Zulfiqar, financial analyst for Profit Confidential. “They shouldn’t be. Consumer demand for silver is really strong. In fact, we are in the midst of a ‘silver rush.’”
Zulfiqar explains that to understand how investors are reacting to silver prices, it’s important to consider precious metals sales at various mints around the world. Year-to-date sales of American Eagle silver coins from the U.S. Mint are up 25% year-over-year at 15 million ounces. If the sales of silver remain consistent, the U.S. Mint is on track to sell 60 million ounces of silver in 2016. This will be the highest on record. In 2015, the U.S. Mint sold 47 million ounces of silver. (Source: “2016 American Eagle Bullion Sales/Mintage Figures,” usmint.gov data set, last accessed April 1, 2016; http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion.)
Globally, Australia’s Perth Mint reported a triple-digit gain in silver sales in 2015. Silver sales of 2.5 million ounces in the first two months of 2016 increased 157% over the same period in 2015. Most recently, February silver sales advanced 165% year-over-year to 1.05 million ounces. This represents the sixth straight month where silver sales topped 1 million ounces. (Source: “Perth Mint Gold and Silver Bullion Sales in February,” coinnews.net, March 10, 2016; http://www.coinnews.net/2016/03/10/perth-mint-gold-and-silver-bullion-sales-in-february/.)
On top of that, India, which traditionally has a huge demand for gold, is building an appetite for silver. In addition to annual demand, silver jewellery, coins, and bars may attract new buyers as a cheaper alternative to gold. Further, the Indian government has not imposed an excise duty on silver jewellery but a tax has been levied on gold and platinum. (Source: “Costly gold may drive up demand for silver in rural India,” economictimes.com, March 2, 2016; http://economictimes.indiatimes.com/markets/commodities/news/costly-gold-may-drive-up-demand-for-silver-in-rural-india/articleshow/51217693.cms.)
“Silver prices are down roughly 70% from their 2011 highs and demand is surging. This should not be overlooked. Suppressed precious metal prices have caused a lot of damage—and it won’t be fixed instantly. It will take time,” Zulfiqar concludes. “Investors should pay particular attention to silver miners. And could make leveraged returns with them. In fact, if silver prices go up by 100%, they could make several times that with silver miners. They’re simply one group you can’t ignore right now.”
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com/customer-service.html
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