Improving Investor Sentiment Helped Drive the Price Higher in 2019: Interim Silver Market Review

Posted by Larry Kahaner

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The last few months have seen a major improvement in investor sentiment towards silver, according to Philip Newman, Director at Metals Focus, who recently presented the Metals Focus / Silver Institute Interim Silver Market Review. The silver price benefitted in 2019 from a host of factors, including global economic and political concerns, as some investors sought safe haven investments, such as silver.

Highlights of the Interim Silver Market Review include:
• Healthy gains were projected for physical silver investment in 2019, with sales of silver bars and coins projected to rise by 7% to a three-year high. In the US, investment was on track to record its first annual increase in four years, thanks to improving price expectations and rising price volatility, although levels remained historically low. In India, the partial recovery that started in 2017 continued in 2019, although the sharp rally in the rupee price saw sales ease recently, particularly in rural areas.

• Disruptions and strikes across South America impacted global mine production, which was expected to fall by 0.7% in 2019 to 849.3 million ounces.

• For the second year in a row, silver industrial fabrication was expected to hold at a record high. However, in the wake of the escalating US-China trade war, several areas of silver electrical and electronic end-uses have struggled. That said, any negative impact on silver demand had been mitigated by higher silver usage in other categories, especially in the automotive sector.

• Global silver jewelry and silverware demand was projected to grow by 3% and 4% respectively in 2019. For both, the year’s increases were almost entirely led by India, where gains had been assisted by increasing awareness of sterling silver, and growth in organized retailing, along with the benefits from restrained silver prices in the first half of 2019. • Overall, the silver market was expected to record a small surplus in 2019. However, this metal should have been easily absorbed by investors as rising macroeconomic uncertainties and fresh monetary easing by major central banks rejuvenated the appeal of safe haven assets from mid-2019 onwards which, looking ahead, should continue to benefit precious metal prices.

For more information about the report including a supply & demand chart, click here.