NEW YORK: The price of silver will rely heavily on trends in investment demand in 2018 but could get a boost from international political and economic risk purchases, according to CPM Group on Tuesday.
“The enormous range of economic, financial and political issues facing the world and individual investors seems more likely to lead to a rekindling of silver demand from investors,” New York-based CPM Group read in its Silver Yearbook 2018.
Although spot silver prices have currently slashed down about 1.6% this year, they often rise in tandem with gold prices in times of global political or economic uncertainty.
Spot silver prices finished up 7.2% in 2017, versus 2016. However, the average price declined 0.5% in 2017. Prices are down roughly 2.5% so far this year as investors pursue higher-yielding opportunities, including global equities.
“The fundamental story on silver is stronger than the investment. Retail investment collapsed, but if this turns around, people could come back into it,” said Miguel Perez-Santalla, vice president of Heraeus Precious Metals.
Silver investment demand dropped 52% in 2017 to 50.2 million ounces on a net basis. CPM Group expects 43.9 million ounces in investment during 2018, the lowest since 2006 when investors added 30.6 million ounces to holdings.
Jewelry and silverware demand is expected to rise for the seventh consecutive year to 306.1 million ounces in 2018, 8.9%