This One Thing Could Send Silver Prices Surging to $50 or Higher
Ignore the noise and pay close attention to the price of silver. It’s possible that the gray precious metal is setting up for a massive move—a move that could take silver prices near $50.00 per ounce or higher.
That’s because there might be some sort of disconnect in the silver market right now. The longer the disconnect remains, the bigger the upside could be once fundamentals come into play.
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You see, at the moment, there seems to be a massive increase in physical silver demand. No, this is not a gut feeling on my part; you can confirm this yourself.
Consider this: the U.S. Mint recently said it’s having a very hard time meeting the sky-high demand for gold and silver bullion coins. In 2020, the mint’s silver coin demand jumped 28%, and that demand has been robust since the beginning of 2021. (Source: “Gold, Silver Coin Demand Surging, Straining U.S. Mint’s capacity,” February 2, 2021.)
Go check any major precious metal dealer: almost all of them will say they have massive orders coming in for silver, and that they’re experiencing several-day delays when it comes to processing those orders. Plus, the premium to buy silver has shot through the roof. This is also an indicator of how much demand there is for the metal.
Ken Lewis, CEO of APMEX, Inc., a reputable precious metal dealer in the U.S., not too long ago said,
In the last week, we have seen a dramatic shift in silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.
(Source: “APMEX Statement on Current Market Conditions,” APMEX, Inc., last accessed February 5, 2021.)
Something Like This Happened in the Palladium Market
Dear reader, you might be thinking: Isn’t silver demand increasing because of groups like “WallStreetBets” and the noise about silver in social media?
Here’s what you have to know: the group telling its members to buy silver is just one factor. I’ve been following the silver market for years, and the figures related to investors buying physical silver have been increasing all along.
Now, what’s the disconnect? The disconnect is happening in the physical silver market. The silver prices you see quoted in the mainstream media are usually the futures market prices.
I believe the futures market could be ignoring what’s really happening in the silver bullion market, and that’s why we could be seeing suppressed silver prices. We’ve seen something like this in the palladium market. The palladium futures market was ignoring the physical supply of the metal, and when the market realized that, palladium prices jumped.
Could the same thing happen to silver prices? There’s a possibility, so it’s worth watching very closely.
As all this unfolds, I’ve been keeping a close watch on silver mining stocks. They could be some of the biggest beneficiaries.
