Forget gold, silver is on fire and could hit $25 an ounce by the end of 2016 – marketwatch british pound dollar exchange rate


“Silver typically tracks gold prices, with bells on,” said Adrian Ash, head of research at BullionVault, in a recent email. “For every 1% move in gold over the last 40 years, silver has averaged [a move of] 1.75% both up and down.” Outsize moves

A big part of the reason for silver’s outsize moves is well-known: silver’s traded on a much smaller volume than gold, so it’s much more volatile and moves tend to be exaggerated.

“Historically, silver tends to trade with 2 or 3 times the volatility of gold, partly because it trades with much less volume day to day,” said Tyler Richey, co-editor of The 7:00’s Report.

He pointed out that after gold prices broke higher in late 2009, it “rallied just shy of 100% to the all-time highs reached in 2011, while over the same time frame, silver rallied more than 200%.”

But also, unlike gold, silver is widely used in industrial capacities and “therefore can both trade alongside gold in scenarios like the ‘risk-on/risk-off’ price action that we are experiencing right now, or with other industrials like copper

Still, Richey said silver’s “precious, safe-haven qualities trump its industrial uses in the long run so in the turbulent wake of the Brexit vote, silver should continue to outperform with gold, while strictly industrial metals like copper underperform.” Supply and demand

“Silver is the poor man’s [gold] and the average Chinese man in the street is still relatively poor,” said Christopher Ecclestone, a mining strategist at investment bank and research firm Hallgarten & Co.

Demand in China has been particularly strong, analysts said usd to sgd rate. On Monday, the most actively traded silver futures contract hit its 6% daily maximum at the open, The Wall Street Journal reported.

“The Chinese silver futures market is heating up quite a bit,” said Sean Brodrick, a resource specialist for the Oxford Club, suggesting that part of the reason for that may be due to the slide in the Chinese yuan.

pointed out that central banks have very few silver on their balance sheets, while many more have gold. “This could potentially be a positioning strategy thinking that central banks being underweight silver may almost force them into the position of needing to buy silver,” he said.

Silver supply having been relatively flat for the last several years and any increase in investment demand has the ability to put silver “in risk of a shortage,” said Chanin.

Gold and silver’s relationship has changed as well and as it eventually moves back in line with the historical norm, prices for silver may rise even more.

The gold-to-silver ratio currently stands at about 1 to 67 exchange rate usd to aed. In other words, a single ounce of gold is worth about 67 ounces of silver market futures today. The ratio can serve as an indicator to determine when to buy or sell the precious metals.

The ratio has averaged about 45, said Matthew Tuttle, chief investment officer at Tuttle Wealth Management LLC. “If we look at $1,400 gold, which is my current target, we can see silver get to $28-$32 as the ratio moves toward the 45 area.”

That is “most likely” to occur in mid-November after the U.S. presidential election, he said. “Historically, these [high] ratios occur around market panics cad to usd history. After the election some of the uncertainty should come down.” Price points

Now that silver has hit his previous forecast of $20 by the end of the year, the Oxford Club’s Brodrick raised his target on silver to $25.50.

The 7:00’s Report’s Richey said a pullback to between $17 to $18 an ounce wouldn’t be surprising and would actually “offer a favorable entry point for long positions.”

Ecclestone said he expects prices to end the year at less than $18 an ounce, but prices “may touch $25 on hysteria and the buyers at that level will lose their shirts.”