Silver Supply Trouble

Silver bullion prices are likely to rise further as there is “supply trouble brewing” as strong industrial and investment demand are confronted by declining supply.

“There are signs that this year could be a pivotal year for the silver market,” New York-based CPM Group said in its “Silver Yearbook 2016.”

CPM forecast a global deficit of 44.7 million ounces in 2016, much larger than the 11.9-million-ounce deficit in 2015 and the biggest deficit since 2005.

CPM expect demand for silver coins to fall to 142.8 million ounces this year, down from record levels of 145.7 million ounces in 2015. Silver coin demand in China, however, was forecast to rise to 24.5 million ounces from 22.3 million ounces in 2015.

Silver had its biggest quarterly rise in nearly 30 years in the first three months of 2016 as ETF investors, buying of silver coins and bars and speculators in the futures market pushed prices higher.

Silver prices fell to $13.60 an ounce in December, the lowest in more than six years. Silver has since rallied nearly 20 percent in the first three weeks of April to an 11-month high at $17.70 an ounce and has entered a new bull market.

Reprinted with permission from GoldCore.

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