This Could Spark a Rally in Silver Prices
Famous Dutch economist and investor Willem Middelkoop is forecasting silver prices to shoot up for one simple reason. In one of his latest interviews, the investor-cum-fund manager presented a solid bullish case on silver prices. It could help shape your silver price forecast for 2016.
Middelkoop pointed out the fact that many zinc mining companies are shutting down operations due to low precious metal prices. Silver is mostly a byproduct of zinc and lead mining. In fact, a third of the world’s silver comes from zinc and lead mines. Middelkoop warns that at the pace at which zinc mines are closing, we’ll soon be facing a dire shortage in the silver supply.
Middelkoop sees this shortage becoming widespread before we make it to 2020. (Source: “Gold – Willem Middelkoop,” YouTube, February 2, 2016.)
Willem Middelkoop: Silver Price Outlook for 2016 and Beyond
Middelkoop explains that the total available above-the-ground silver in the world has been depleted in the last 30 years. This occurred on the back of massive production cuts by miners. However, unlike gold, silver finds utility in a number of industries. This is why demand kept growing during the same period. As a result, the grey precious metal is about to face a significant supply deficit.
“We don’t have any large amount of above-the-ground silver stocks anymore. Gold is always available. If they need to bring the gold price down, they can always find a few gold bars in the central bank’s safe. But silver is not owned by central banks anymore,” says Middelkoop. (Source: Ibid.)
He further adds that silver once formed a major input in currency coins. But growing demand made us convert that silver and put it to better use. For this additional reason, he says, the above-the-ground silver stocks have declined by a huge margin over the last 30 years. At the same time, production has slumped. Basic demand and supply mechanisms suggest that silver prices must head upward in the coming days.
In fact, this bullish silver price forecast for 2016 doesn’t just apply to silver; Middelkoop predicts the same for all precious metals.
“If you study current supply and demand figures, there’s a production deficit now in platinum, palladium, silver, and gold,” warns Middelkoop. (Source: Ibid.)