Pay Attention to India When Looking At Silver Prices
Pay close attention to silver prices. The gray precious metal could provide investors with massive rewards. Silver seems to be severely undervalued and utterly ignored.
Why do I think silver is undervalued?
You see, the price of silver is down roughly 67% off its peak in 2011. With this, one would assume the fundamentals of the silver market to be outright dismal, and also assume that there is no demand for the metal. This is not the case.
In reality, the fundamentals of the silver market are better than they were back in 2011, when silver prices were close to $50.00 an ounce.
Here’s what investors need to know: regardless of the prices, we still see buyers coming in. One buyer that must be noted is India, a country known for its appetite for gold. Over the past few months, India has imported massive amounts of silver.
Consider this: in May, the country imported $442.91 million worth of silver. In the same period a year ago, silver imports into India amounted to just $39.54 million. This represents an increase of 1020% year-over-year! (Source: “Quick Estimates For Selected Major Commodities For May 2017,” India Ministry of Commerce and Industry, last accessed June 22, 2017.)
Mind you, this was not an anomaly. In April, silver imports amounted to $352.85 million. Don’t just stop there; go back to December 2016. Silver imports were just $87.09 million that month. (Sources: “Quick Estimates For Selected Major Commodities For April 2017” and “Quick Estimates For Selected Major Commodities For December 2016,” India Ministry of Commerce and Industry, last accessed June 22, 2017.)
Dear reader, there’s clearly a trend here: Indian consumers are building up an appetite for silver.
Why Is India Importing So Much Silver?
If you recall, not too long ago, the Indian government made a very scary gamble. It made the most-used currency notes in the country literally obsolete. This resulted in chaos in the country, and Indian consumers found themselves holding a piece of paper that was worth nothing.
Indian consumers and savers could be thinking about diversifying their holdings. Maybe, just maybe, silver is something they think will provide them some safety. This could be because, for an average Indian consumer, gold is still very expensive.
Where Are Silver Prices Headed Next?
If you listen to the mainstream media, it will have you convinced that silver isn’t even worth a look. Understand, however, that the greatest opportunities are formed when asset prices are down and no one wants to touch them, not when they are at their all-time highs. At the moment, silver is down immensely from its highs.
What’s amazing is that, as silver prices are suppressed, the fundamentals of the silver market are improving very quickly. All of this combined makes silver an undervalued asset.
Here’s a bold prediction: If you miss out now, you could be looking at the precious metal a few years from now and saying, “I should’ve paid more attention to silver when it was trading at $16.00.”
As I see it, a $50.00 price for silver could be achievable much sooner than expected. Also, it may be wise for investors to start paying attention to silver producers, since they provide leveraged gains to silver prices. As silver soars, silver mining stocks could see a parabolic move.