Silver famously enjoys a dual nature as a monetary metal and a commodity. Because of silver’s strong industrial applications, which run from solar power to appliances and insulation, the housing data were seen as bullish for the metal.
Traders are all looking at the pending home sales, which were terrific, and you had good new-home sales, RBC Wealth Management exec George Gero told Bloomberg. That’s been helping silver. Basically, they’re looking at it as an industrial metal, not as a precious metal.
The housing reports follow news from the Royal Canadian Mint, which saw its silver Maple Leaf coins hit an all-time sales record in the first quarter, as well as bullish supply-and-demand prognoses from Thomson Reuters GFMS and the Silver Institute.
We’ve also seen some major firms and investment banks increase their silver-price targets, including CPM Group, Bank of America Merrill Lynch, and Deutsche Bank.
But the latest price target touted by a mining official this week takes the cake. First Majestic Silver Corp. CEO Keith Neumeyer is now predicting three-digit silver.
For the near term, Neumeyer said, The bottom is in. Were in the beginning of a new bull phase in a very cyclical market. Gold prices are being very supportive here. Silver prices have moved higher obviously. I think we’ll end in the $20 range in silver and probably around $1,500 gold by the end of the year.
For the longer haul, his three-digit silver forecast is for $140 by 2019! That would be almost triple the roughly $50 peak last seen in 2011. The highest projection among analysts surveyed by Bloomberg is $57 an ounce in 2019, the news agency noted.
Neumeyer’s $20 target looks reasonably realistic for the coming months, but his $140 forecast disputed by several analysts interviewed by Bloomberg is certainly rich food for thought.