Silver Prices Poised for Huge Gains?
Pay attention to silver prices if you are looking to double your money quickly. Yes, that’s a very bold statement, but it could be possible.
As it stands, the fundamentals of the silver market continue to work in favor of those who are bullish—demand is increasing and supply is plunging.
Consider this: in the first four months of 2016, the U.S. Mint sold 18.91 million ounces of silver in American Eagle coins. In the same period a year earlier, the mint sold 14.92 million ounces of silver in American Eagle coins. (Source: “Bullion Sales/Mintage Figures,” U.S. Mint, last accessed May 10, 2016.)
Simple math suggests demand for silver at the U.S. Mint is about 27% higher than what it was last year. Keep in mind that 2015 was a record year for silver sales at the U.S. Mint. So as of right now, it looks like 2016 will be another record year for silver sales.
And don’t for a second think that it’s only the U.S. Mint witnessing robust demand. We see this phenomenon prevailing across the globe.
Take the Perth Mint—the biggest mint in Australia and well respected globally—as another example. In April, it sold 1.16 million ounces of silver bullion. This was 146% higher than the same period a year ago. Perth Mint silver sales for the first four months of this year have been over one million ounces. (Source: “Perth Mint Gold and Silver Bullion Sales in April,” CoinNews.net, May 9, 2016.)
Looking at all this, whoever said buyers will run out as silver prices remain suppressed, they have been wrong. If anything, lower prices have brought more silver buyers.
One thing lower silver prices have done, and not many expected, is hurt the supply side of the market.
If you look closely, you will notice silver mine production has taken a severe hit.
Take U.S. silver mine output as one example. In 2015, it declined more than nine percent. (Source: “Mineral Industry Surveys,” U.S. Geological Survey, last accessed May 10, 2016.)
Mind you, other major silver producing regions are reporting dismal figures as well. Lower silver mine production isn’t just a problem in the U.S.
Double-Digit Upside in Silver Prices?
The imbalance we see in the silver market is going to cause the gray precious metal’s prices to skyrocket. Don’t be shocked if a few years from now silver prices are trading near their 2011 highs—around $50.00 an ounce.
If you don’t want to wait a few years for silver prices to hit $50.00, then look at silver mining companies. Owning a few silver mining companies could help you double your money much quicker than owning silver bullion.
We have seen this happen already. So far in 2016, silver prices are up roughly 25%. With this, we have seen several silver mining companies’ shares double in value. If silver prices rise another 25%, it will not be shocking to see those mining companies double in value again.