'Silver can benefit from flight to safe haven'

The Silver price could benefit from increasing political and economic risks this year, but only if investors substantially increase their Buy silver than in the past year. This is the conclusion drawn by research agency CPM Group on the occasion of the publication of its latest Silver Yearbook 2018.

According to the agency, which annually publishes figures on the silver market and the gold market, there are many different economic, financial and political issues in the world this year that silver can be used as a safe haven profit.

Less demand for silver

Last year, the price of silver fell by 6.7% in euro terms, a decline that was accompanied by a significant drop in demand for Silver Coins and give birth. According to figures from the CPM Group, investment demand halved last year to 50.2 million troy ounces and will fall further to 43.9 million troy ounces in 2018. That's because many investors currently prefer other investments and because the price of silver has shown multiple false breakouts in recent years. The CPM Group writes the following about this:

"In recent years, the silver price has risen several times and then fallen again. Such a price development usually drives investors away, makes them cautious and creates a wait-and-see attitude."

Geopolitical tensions

Due to the recent price development of silver, investors have become somewhat cautious, but that may change due to geopolitical developments, according to the CPM Group. The simmering tensions between the United States and China and between the Western world and Russia could trigger a flight to safe havens. This is primarily beneficial for gold, but silver can also benefit from a pick-up in demand.

Another factor that could be positive for silver price is a change in supply and demand dynamics. The research agency writes the following about this:

"Although silver is widely available worldwide compared to gold, and silver can be more easily liquidated from stockpiles, there has been a decline in the production of silver mines since 2016. That's expected to continue over the next decade. Declining mining production and rising industrial demand are expected to cause a tightening in the market."

The CPM Group expects the demand for silver for processing in solar panels to increase further this year to 107.3 million troy ounces. Also, demand for the precious metal is expected to increase by 8.9% this year to 306.1 million troy ounces.

'Silver can benefit from flight to safe haven'