Silver Prices Could Make a Solid Run Toward $50 in 2020
At $19.00 per ounce, silver prices are too low.
Year-to-date, the price of silver has jumped by over 9.6%, but this may not be all. It’s possible that silver will end the year with a big bang: a massive run toward $50.00.
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Pay very close attention to what’s happening to silver sales at mints around the world. It actually looks like there’s a silver rush happening. You won’t hear about this in the mainstream media because it doesn’t get them many clicks to their stories.
Consider the U.S. Mint, for example. In the first six months of 2020, the mint sold 12.6 million ounces of silver in American Eagle coins. In the first six months of 2019, this figure was 10.0 million ounces. (Source: “Bullion Sales,” U.S. Mint, last accessed July 16, 2020.)
Simple math here: sales of silver coins at the U.S. Mint are running 26% above the 2019 figures. Keep in mind, in April and May of 2020, sales were severely impacted by lockdowns and shutdowns. In the coming months, this could change and silver sales could be much higher.
Also keep in mind, silver is a global phenomenon. Mints around the world are reporting stellar sales figures as well.
Look at the Perth Mint, the biggest mint in Australia. In the first five months of 2020, this mint sold 6.9 million ounces of silver. In the same period a year ago, its silver sales were 3.9 million ounces. This represents an increase of more than 75% year-over-year. (Source: “Perth Mint Gold and Silver Bullion Sales Slow in May,” CoinNews.net, June 19, 2020.)
At the Royal Canadian Mint, during the first quarter of 2020, silver sales volume spiked a bit year-over-year. The Canadian mint sold 6.6 million ounces of silver during the first quarter of 2020. In the first quarter of 2019, silver sales were 5.5 million ounces. This represents an increase of 20% year-over-year. (Source: “Royal Canadian Mint Reports Profits and Performance for Q1 2020,” Royal Canadian Mint, May 22, 2020.)
Regarding the demand for the precious metal, Marie Lemay, President and CEO of the Royal Canadian Mint said, “The Mint capitalized on market opportunities in the first quarter. Demand for gold and silver bullion was up, refining volumes were above plan and storage volumes remained steady and healthy.” (Source: Ibid.)
What’s Ahead for Silver Prices?
Dear reader, silver has been ignored for a while.
Understand this: in times of uncertainty, investors rush to buy precious metals, as they are great wealth preservers and a hedge against uncertainty.
Over the past few years, gold has gotten a lot of attention. Giving you some perspective, over the last two years, gold prices have jumped by over 45% while silver is up just 20%.
Now gold is starting to get expensive. Gold is about $1,800 an ounce while silver trades at $19.00. From a historical point of view, silver is remarkably cheap. So it’s possible that silver will become the “poor man’s gold” and we will see lots of buyers come in.
I will end with this: shares of a lot of major silver miners have spiked higher in anticipation that silver prices could be headed higher in the coming months and quarters. However, a lot of smaller silver mining and exploration companies remain undervalued. As the price of silver moves higher, these companies’ shares could generate stellar returns.
