New York, NY, May 3, 2016 – Profit Confidential (www.ProfitConfidential.com), an e-letter published by Lombardi Publishing Corporation, a 30-year-old consumer publisher that has served over one million customers in 141 countries, is issuing a statement on why silver prices will continue to trend significantly higher in 2016.
“Silver has been one of the best-performing investments in 2016, up more than 25% year-to-date. By comparison, the S&P 500 has advanced around 2.5%,” says economist and lead contributor Michael Lombardi. “From a technical perspective, silver has traded above its 50-and 200-day moving averages for months now. With silver price momentum strong, it’s important to remember the basic rule of technical analysis: the trend is your friend until it’s broken.”
Lombardi explains that in addition to a technical perspective, the underlying fundamentals suggest supply and demand are distorted, with demand soaring amidst lagging supply. In the first two months of 2016, silver production from Canadian mines decreased 13% year-over-year, while in 2015, silver mine production in Canada declined more than 20%. (Source: “Production of Canada’s Leading Minerals,” Natural Resources Canada web site, February 2016; http://sead.nrcan.gc.ca/PDF/PCLM-201602E.pdf.)
More broadly, global silver mine production is projected to decline through 2019. Mexico, the largest silver producing country in the world, is currently seeing supply dwindle; between November 2015 and January 2016, silver production fell 10% to just 385,000 kilograms. (Source: “Value and Volume Production of Silver,” Mexican Geological Survey web site; http://portalweb.sgm.gob.mx/economia/en/mining-production/silver.html; last accessed April 29, 2016.)
“As for demand, the number of buyers is increasing. In 2015, a record 130 million ounces of silver coins were sold, accounting for 12% of physical demand. Even countries like India that traditionally favor gold have built up an appetite for silver,” Lombardi concludes. “Despite the strong increase in silver prices, the metal remains undervalued and an opportunity for investors. Even though silver is up 25% since the beginning of the year, some of the quality silver-producing companies are up more than 100%, and there is more room to run.”
For more information on Profit Confidential, visit www.ProfitConfidential.com.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.LombardiPublishing.com.