{"id":270,"date":"2019-12-17T22:04:48","date_gmt":"2019-12-17T22:04:48","guid":{"rendered":"https:\/\/goldsilverdesk.com\/news\/?p=270"},"modified":"2024-07-08T18:04:05","modified_gmt":"2024-07-08T18:04:05","slug":"can-silver-prices-top-golds-performance-in-2020-analyst-watching-improving-demand","status":"publish","type":"post","link":"https:\/\/goldsilverdesk.com\/news\/can-silver-prices-top-golds-performance-in-2020-analyst-watching-improving-demand\/","title":{"rendered":"Can silver prices top gold’s performance in 2020? Analyst watching improving demand"},"content":{"rendered":"\n

Anna Golubova – Monday December 16, 2019<\/strong><\/p>\n\n\n\n

Editor’s Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It\u2019s a showdown of global proportions, so don\u2019t miss all our exclusive coverage on how these factors could impact your 2020 investment decisions.<\/strong><\/p>\n\n\n\n

Silver is looking to play catch-up to gold and\npotentially outperform the yellow metal next year, according to analysts, who\nare eying the U.S.-China trade progress and silver’s improving demand as key\ndrivers.<\/p>\n\n\n\n

Both silver and gold had a stellar year despite dropping off its 2019 highs reached this fall. During the last 12 months, spot gold rose around 19% and silver advanced 16.9%, according to Kitco’s aggregated charts.<\/p>\n\n\n\n

Spot silver prices reached their 2019 peak at the beginning of September, trading above $19.60. At the time of writing, spot silver was at $16.99 and March Comex silver was at $17.07 an ounce.<\/p>\n\n\n\n

The biggest drivers for silver next year will be\nthe U.S.-China trade situation and global growth prospects, Standard Chartered\nprecious metals analyst Suki Cooper told Kitco News on Tuesday.<\/p>\n\n\n\n

“For silver, trade negotiations are one of\nthe key risks. Given the impact, it has on industrial demand growth, economic\ngrowth, and outlook for the tech sector,” Cooper said. “We do expect\nthe Federal Reserve to remain on hold in 2020, but there will likely be\ncontinued concerns around the U.S.-China trade negotiations\u2026 Given that there\nis still negative-yielding debt on a global basis, this is likely to create a\npositive backdrop for safe-haven assets.”<\/p>\n\n\n\n

The outcome of Brexit will also play a key role,\nespecially from the perspective of its impact on European growth, Cooper\npointed out.<\/p>\n\n\n\n

“For gold and silver, it is going to be the\nmacro-environment that is a key driver,” she said. “We think the\ntrade tensions will be the underlying theme for the complex as a whole, whether\nthat’s going to impact industrial demand or auto sector growth. Or whether that\ntriggers safe-haven interest in gold and silver.”<\/p>\n\n\n\n

Price projections for 2020<\/strong><\/p>\n\n\n\n

One of the more popular calls for silver next\nyear is for prices to trade around $18 an ounce, with most gains set for\nyear-end.<\/p>\n\n\n\n

Silver could close next year around $17.50 an\nounce, RJO Futures senior market strategist Phillip Streible.<\/p>\n\n\n\n

The Dutch bank ABN AMRO projects silver to reach\n$18 an ounce by year-end after averaging $16.60 throughout 2020.<\/p>\n\n\n\n

“We think that an aggressive sell-off in\nsilver prices in the coming months will be an opportunity to position for\nhigher prices later in 2020,” ABN AMRO senior FX and precious metals\nstrategist Georgette Boele said. “Silver prices will probably be more\nsupported if global growth and global trade start to stabilize and improve\nsomewhat.”<\/p>\n\n\n\n

Strategists at TD Securities see silver’s\npotential peaking at around $20 an ounce next year. “Silver [could] jump\nto $20\/oz by the end of 2020 in response to its firming fundamentals and\nspillover investment demand from the yellow metal,” the bank’s strategists\ntold Kitco News.<\/p>\n\n\n\n

“A lot of the drags on growth, such as\nprint episodes of deleveraging in China, tightening in the U.S, all been\nflashed out. Going forward, we should see some improvement,” TD Securities\nstrategist Daniel Ghali added.<\/p>\n\n\n\n

Standard Chartered is projecting for silver to\naverage at $17.50 in 2020 and reaching a peak of $18 in Q2. Metals Focus said\nit sees silver averaging around $19.40 in 2020, with the potential to touch a\nhigh of over $22.<\/p>\n\n\n\n

Silver could be looking at a fairly wide range\nnext year, with support at $13 an ounce and resistance at just below $21, according\nto Kitco’s very own senior technical analyst Jim Wyckoff.<\/p>\n\n\n\n

“The monthly continuation chart for nearby\nComex silver futures reveals prices are in the middle of a wide trading range,\nbound by longer-term chart resistance at the 2016 high of $20.825 and by the\n2015 low of $13.666,” Wyckoff said.<\/p>\n\n\n\n

Silver’s technical picture going forward looks neutral, neither favoring the bulls or the bears, added Wyckoff. “The monthly chart suggests that in 2020 silver prices will continue to trade in choppy fashion within the range defined by the support and resistance lines seen on the chart,” he said.<\/p>\n\n\n\n

Silver could outperform gold in 2020<\/strong><\/p>\n\n\n\n

One of the significant concerns with silver this\nyear has been its underperformance in comparison to gold, especially when\nprices hit multi-year highs in August and September.<\/p>\n\n\n\n

“Whereas the gold price was trading at a\n6\u00bd-year high in September and was only 20% short of its all-time high, the\nsilver price achieved a three-year high of just under $20 at the same time.\nThis still left silver 30% below its spring 2013 level, however \u2013 not to\nmention a long way off the all-time high of around $50 that it had reached in\n2011,” Commerzbank said in its outlook.<\/p>\n\n\n\n

As we countdown to the new year, many analysts\nare now more optimistic on silver in comparison to gold. Silver could\noutperform gold next year, said TD Securities commodity strategist Daniel\nGhali, noting that the gold-silver ratio could improve in favor of silver.<\/p>\n\n\n\n

“Over the last few years, investment for\nsilver and gold disconnected quite a bit. Over the last few months, however,\nthere have been signs that the correlation of investment activity for both\nmetals has turned positive again,” Ghali told Kitco News. “We are\noptimistic on the prospect for gold, but we think it will pay off more for those\nwho are to purchase silver. We think the industrial demand side of the equation\nwill improve later in the year.”<\/p>\n\n\n\n

RJO Futures’ Streible is also more optimistic on\nsilver due to its demand component. “The ratio between gold and silver\nwill continue to crack lower, favoring silver and taking away from gold. Silver\nwill take from some of the other metals like platinum and palladium and the\ntrade deal will help boost the technology demand for silver,” Streible\nhighlighted.<\/p>\n\n\n\n

On the other hand, Standard Chartered’s Cooper said\nsilver might fail to outperform gold next year, noting a lack of tactical\npositioning in the metal.<\/p>\n\n\n\n

“Until we see firming in underlying supply\nand demand dynamics and investor interest, it is likely we are going to see\nsilver playing catch-up with gold but perhaps not outperforming it just\nyet,” she said.<\/p>\n\n\n\n

Risks to silver’s outlook next year include\nindustrial demand and potential liquidation of ETF holdings, Cooper added.<\/p>\n\n\n\n

“We expect silver to remain elevated, but\nwe do not see a sharp move higher. For silver prices to move sharply higher, we\nwould need to see solid growth in terms of industrial demand as well as\ncontinued interest on the investor side,” she said. “In terms of the\nupside, there is still room for investors to position in silver. The biggest\nupside risks are for the Fed to start cutting rates in 2021.”<\/p>\n\n\n\n

Rare buy call<\/strong><\/p>\n\n\n\n

A very rare silver buy call came from the CPM Group ahead of the new year. The group issued an intermediate-term silver buy recommendation for investors in December, stating that “the silver market is at a critical vertex at present.”<\/p>\n\n\n\n

Silver prices are more likely to rise than fall\nin the next few years, but uber bulls might still be disappointed, explained\nCPM.<\/p>\n\n\n\n

“Silver market fundamentals are precariously\nsimilar to the critically poor conditions that existed in 1989. Our\nexpectations are that the market may avoid the long period of net investor\nsilver selling and low prices that followed from that year,” said CPM\nGroup’s vice president in charge of research Rohit Savant.<\/p>\n\n\n\n

CPM defined its intermediate timeline as between\ntwo and three years. The last time CPM issued a recommendation on silver was\nback in May 2011 when prices reached $48.19 and CPM advised to sell.<\/p>\n\n\n\n

“CPM has waited until now for a variety of reasons known to our clients. For one, the market has not supported strongly higher prices over the past few years. As a result, prices have not moved sharply off their 2015-2016 lows,” CPM managing partner Jeffrey Christian clarified.<\/p>\n\n\n\n

__________________<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Anna Golubova – Monday December 16, 2019 Editor’s Note: 2020 is expected to be another year of significant uncertainty and turmoil. But the question is what asset will emerge the victor when the dust settles from the global trade war, Brexit, recession threats, negative bond yields. It\u2019s a showdown of global proportions, so don\u2019t miss … Continue reading “Can silver prices top gold’s performance in 2020? Analyst watching improving demand”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-270","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nCan silver prices top gold's performance in 2020? 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