The shortage of silver could lead to a rise in its price in 2019

Deepening supply shortages for silver may lead to an increase in metal prices this year. In December, the price of silver rose by 9.1%. The price was boosted by the continuation of the trade war, the weakening US dollar and the prospects for a slower increase in the US base rate. This reinforced the demand for precious metals. In this case, silver is expected to reach new peaks, for the seventh consecutive year its demand exceeds its production level.

Silver companies are giving up on new mining expeditions, projects and the opening of new deposits due to global economic uncertainty, which could lead to a rise in the metal price to $ 17.50 per ounce.

However, the output gap has not led to a real leap in the price of the metal in recent years. Silver is more traded as a precious metal than an industrial one that is heavily influenced by the balance between supply and demand. Indeed, the industry with a real application of the metal in production will most likely contribute to the increase in demand and the price in 2019. The demand is expected to increase by 50% by 2023, compared with 17% for copper and 11% for gold.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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