Silver Price Prediction for end of 2016 (Part 1 of 2)

Silver Price Prediction for end of 2016 (Part 1 of 2)


Welcome to illuminati silver, we tell you
the truth about silver. Today is Friday 16th September 2016 and we
are providing our views on the future direction of silver prices for the remainder of the
year. We had planned to produce this as a single episode, however due to its length
we have broken it down into 2 parts. Part 1 produced today and part 2 on Sunday. Then
next week we shall give our predictions for gold.
How often have we been asked, at what level do you think silver will rise to in 2016?
It is without doubt an interesting and fair question to ask a channel discussing precious
metals. Of course without a crystal ball that actually works, one can only provide an educated
guess, hopefully supported by financial and political analysis.
At the time of writing this report, silver stands at $19.03. Its one year high has been
$20.87 its 3 year high $23 and its 5 Year high $41.23 and its all-time high- $49.45
or many round it up to $50. This compares with a 5 year low of $13.58 and an all-time
low of $1.27 So why are we mentioning these prices? Well
firstly to put into perspective the parameters we are looking at. An all-time high of $50
was achieved on 2 occasions – once under the Hunt Brothers manipulation in 1980 and
secondly under the extreme economic conditions witnessed in 2011 as a result of the 2008
economic crisis. Both occasions were an extremity and despite this, $50 was silvers peak. (OK
we could allow for inflation etc. etc. but these headline figures are important).
Investment decisions are often based on psychology as well as mathematics, trend analysis and
opportunity cost. With Industry currently undergoing a recession, or at best very nominal
growth, be under no illusion that the only parameter that can drive silver prices significantly
higher in the short term – i.e. 1 -2 years is investment demand. Now whether you are
a chartist, fundamentalist, hedge fund or outright gambler, psychology plays an important
part in your price determination. We all know that mining companies in recent years have
been able to reduce their AISC significantly, falling from as high as $30 an ounce to, in
some cases, below $10, with the average resting somewhere between $12 – $16. So at the current
$19, miners are making money, a lot more than they thought they would just 12 months ago
when silver was languishing between $13 and $14 per oz.
So what are we trying to say here? Well in our view, even if there is an economic recovery,
and many believe there will not be, then silver prices have a ceiling because, allowing for
a year of healthy prices i.e at current levels or marginally above, supply can be improved
sufficiently to meet industrial demand, thereby capping prices to little more, in our view,
than $22 – $25 (perhaps marginally beating its 5 year high).
So let’s look at what is likely to be the main industrial driver for silver this year?
Well undoubtedly, many analysts have remarked upon Silver’s use in solar energy technology
as silver plays a key role in photovoltaic (PV) cells. According to renewable energy
research site CleanTechnica, roughly 16 gigawatts (GW) worth of solar panels are expected to
be installed by the end of 2016. That marks a significant increase of 119% compared with
2015 installations. The Silver Institute projects some 70 million ounces to be used for solar
energy this year. In addition a number of other industrial uses
are cited which include: batteries, dentistry, glass coatings, LED chips, medicine, nuclear
reactors, photography, semiconductors, touch screens, water purification and wood preservatives.
However, despite all of these a 1%, 2% or even 3% rise in global productivity will be
insufficient to move prices significantly from current levels.
So what can enable prices to exceed this level during the next couple of years?
Well undoubtedly they are economic and psychological and here are some of these influences: 1. Demand for silver bullion has skyrocketed
in recent years, and that growth is expected to throughout 2016. Sales of the 1 oz. American
Silver Eagle coin – the official silver coin of the United States – have soared
370% since 2007. According to the U.S. Mint – the government agency that controls coin
circulation – Silver Eagle sales hit a record 47 million units in 2015.
What’s even more bullish for silver prices is bullion demand in 2016 was already on track
to outpace last year. As of May 3, roughly 19.6 million Silver Eagle coins had been sold
and predictions of 60 million eagle sales were being touted for the year. However in
July a representative of the Mint allegedly admitted that they were not going to produce
more than 50 million ounces of silver eagles – in other words restricting demand, thereby
potentially uplifting their price in the secondary market.
Consumer demand for coins isn’t just growing in the United States. For example, Australian
silver sales hit 4.28 million ounces in the first quarter of 2016. That marked a 165%
increase from Q1 in 2015, according to Australia’s Perth Mint. It also announced on 20th July
that sales of 2016 Australian Kangaroo Silver Bullion Coins hit the 10 million mark, doubling
expectations. 2. The Federal Reserve’s hesitancy to raise
interest rates will provide another incentive for higher silver prices. Commodities that
are priced in U.S. Dollars benefit from low interest rates. That’s because higher rates
boost the value of the dollar, making dollar-denominated metals like silver more expensive. This makes
silver bullion less affordable to users of other currencies, which reduces demand and
lowers silver prices. At the rate the Fed is moving, it looks like the price of silver
can look forward to lower interest rates for some months to come. So far, Fed Chairwoman
Janet Yellen left rates unchanged due to slowing economic growth. However FED hawks are now
commenting upon a rate rise soon. 3. Movement in the gold/silver ratio will
keep attracting investors to the silver market this year. The gold/silver ratio has traditionally
been one of the more important metrics used in the metals market. It’s used to calculate
the relative values of gold and silver to each other. To find the ratio, you divide
the current gold price per ounce by the current silver price per ounce. The ratio hit record
highs at a peak of 83 during the second week of March, meaning 83 oz. of silver was required
to buy one ounce of gold. That extreme ratio – which has only been reached three other
times since 1996 – seemed to pull the silver price lower until a change of psychology or
temperament kicked in whereby it appeared that all major investors thought – hang
on this GSR is far too high and was corrected very rapidly to current levels.
Since then the gold/silver ratio has plunged to its current 69 -70 range resulting in a
40% increase in silver prices for the year to date. Some investors and commentators believe
that the ratio will fall further and closer to its more traditional level of 55 any time
soon. 4. Demand for physical silver will rise in
2016 thanks to its “safe haven” appeal. A safe-haven investment is one whose value
either increases or remains the same during periods of market volatility. Investors and
traders keep safe havens in their portfolios as insurance against unforeseen drops in the
Dow Jones Industrial Average or S&P 500. Low interest rates and declining stocks push
silver prices higher due to the metal’s appeal as a safe haven for your money. Metals like
silver are considered safe havens because they’re physical assets. Silver prices will
either move sideways or increase when the stock market dramatically dips.
5. Silver jewellery sales are growing, and that’s bullish news for silver prices.
According to the Silver Institute, sales of silver jewellery in the U.S. increased in
2015 for the seventh straight year. Roughly 60% of jewellery retailers saw an average
15% increase in sales. Not to mention nearly 50% of all U.S. retailers said their silver-based
items had the highest turnover rate in 2015. About 87% of U.S. retailers were optimistic
that strong silver-jewellery sales would persist into 2016 and this appears to be the case.
There are several factors that can drag silver prices lower however. Two of the biggest influences
are interest rates and stock market performance. When interest rates rise, silver prices usually
fall because higher interest rates increase the value of the U.S. dollar. A valuable dollar
makes commodities like silver that are priced in dollars more expensive to anyone buying
it with another currency. Similarly, a stock market rally usually pulls
silver prices down because investors like to buy silver as a hedge against market volatility.
When stocks rise, investors spend more money on these more liquid assets than silver.
According to Money Morning Global Resource Specialist Peter Krauth, silver prices are
headed to $22 an ounce by the end of 2016. In Part 2 of this video we reveal our views
on where we see the silver price towards the end of this year.
We hope you have found this video interesting and informative and if so, please give it
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updates and offers. Our Facebook page which is updated daily can be found at facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.

35 Comments

  1. Very in-depth analysis, although no one can predict which scenarios will materialize first for certain. Thank you for the great job and all the time you spent with the research.

  2. Very thoughtful (the Eng accent helps) and an award for a nicely rigourous analysis; but, my gut says $38 as this Fall is just too econo-politically topsey turvey not to force a doubling.

  3. well this was a surprise and very accurate price for the end of the year. personally $25 seems to be the top in my books but in the event of the unthinkable happening predicting price on pass performance may become irrelevant. otherwise I look forward to part 2 as I would guess this will cover the possible down side as well as the unthinkable. thank you for the video.

  4. Currently, I am still eliminating debt versus more PM buying. I was really hoping for a nice dip ( $9 to $12 was spoken about last December). That never happened, and with rather strong prices, premiums on silver kept me away. I did buy gold, but the deal ended up being a bad one as I paid 12% over, when I was told I would get it for 9% over. (Gold Eagles) So he made his profit, but I will never deal with him again, so he lost a customer. Word to the wise do your own math … every single time.

  5. Thank you Mr: IS, , , ,I will actually be seating on the edge of my chair for the rest of this year , , , so exciting . Watching carefully so I can back up the truck and load up on coins and yes , , , ,silver stocks as well.

    Question ?? , , , , Do you think silver will be impacted much by China's inclusion in the IMF and it's disclosure of precious metals it has on board??

    And also I wonder if PMs will be impacted by the rumors of the possible reemergence of the "Glass Steagall " act

    Thank you much !
    may the force be with you

  6. Being a retail silver investor is like being an extra in a "Clash of the Titans" movie.  You are hoping not to get crushed while the giants battle it out above you.

  7. The author needs to understand that higher interest rate at this current time cannot drag down prices of precious metals, as higher interest rate is dangerous for the stock market. So precious metals have just one way to go which is UP!

  8. thanks again I.S
    I know its wise to buy low and all that, but I am happy to swap my fiat debt instruments for REAL money at any price and thankful for that at the moment.When one stands back and takes a macro look at the world there is not to much to be positive about. The great distraction of the markets is doing its trick as usual getting this ready for the next harvest…looking forward to the second part.

  9. "Higher interest rates boost the value of the dollar"
    Everyone says this, but there's no evidence for this claim at all. There's little to no correlation between Fed tightening and a stronger dollar. The Fed raised rates in December, which was when the DXY peaked at 100 and the dollar has been under pressure ever since. Check out this chart for other Fed tightening cycles and you'll see what I'm talking about.
    http://static4.businessinsider.com/image/569588c0e6183e1d008b8e8c-1200/.jpg

  10. …ratio will fall to it's more 'traditional' level of 55? WAT? The ratio of metal in the ground is roughly 10:1 (silver to gold). In 2011, when metals spiked, it dropped to around 30. What makes you think it'll drop to only 55 and stop there when the SHTF?

  11. I need to ask you because I am in a bit of a dilemma here. I can't seem to find any good answer to this question. What is better, the Canadian silver maple leaf, or the Australian silver kangaroo?

  12. This is only a question based on 'suggestions', but what would you rather spend your fiat on, generic silver rounds (more bang for the buck) or gov backed 2.00 – 3.00 higher premium coins? I'm thinking of buying $500-$1000 USD in silver, Thank you

  13. The main advantage to eagles is recognition,acceptable premiums,and since its currency,less likely for counterfit since the sectet service will go after them with a vengence

  14. Nice explanation! Gold and silver are heavily promoted by many traders. Some convincing Some not really. As far as i know, from 1992 to 2012

    – Gold has risen 450%
    – Silver has increased more than 600%.

    They are the safe heaven to protect our asset. But desperate governments could confiscate them like they did in the past

    There is an asset that is forgotten by most of investors. It has risen insanely 1005% from 1992 to 2012. It is less likely confiscated by the Government. You have to check it out before the golden opportunity is over. Thumb up if you want to know about it !

  15. For some 2016 presidential race music videos type in "POMTTH" in the YouTube search function. There are over 80 music videos there for free viewing.

  16. All this is BS….. There simply isn't enough Silver to go around… if just all Americans dedcided to buy 2 ounces today all the years mining silver supply is GONE! The Price of silver is completely manipulated by the paper markets… you can't sell 400 ounces on paper for every one ounce that exists and not have a major deleveraging at some point…. The price of gold at $1300 and silver at $19 is rediculous as Keith Niemeyer from First Majestic Silver says… "I'm pulling out 9 ounces of silver out of the ground for every once of gold"…. thats a 9:1 Ratio that should have silver at $144 U.S. right now…Great voice but BS.

  17. the price elasticity quotient is strongly dependent on the variable so… it depends.. and all this information is neat and right, but depending..

  18. my prediction for silver price in 2020 will be 1 trillion dollars because dollars world be worthless due to hyper inflation

  19. Interesting points you make here, however, I do have to point out some key points you missed out in your presentation;

    1. Deutsche Bank have admitted to Silver price manipulation

    2. Deutsche Bank, coincidentally is linked to pretty much all other banks in Europe, with trillions in toxic derivatives on their books , is following in the footsteps of Lehman Brothers is threatening to bring about an economic collapse in 2016-2017.

    3. Banks are on the verge of introducing negative rates as well as already instilled, stealthily, Bail-In laws in the event of such a collapse, using customers' deposits as collateral.

    4. Comex at risk of defaulting and the paper ETF markets thus also being at risk of being exposed for what they are, not worth the paper they are written on, and being leveraged by the 10s if not 100's in ratio to the physical supply.

    5. The new china Fix which now has the ability to show 'real' market value, and less 'rigged' than the current London fix.

    6. You say you represent a group of individuals with a background in banking and so what you have said is what I would expect such a person to say, either disinformation or blinded by your false belief that the dollar is the 'gold standard'.

    Other than these points you missed out, not a bad presentation.

  20. yeah but you didn't mention where is there to run after this ship crashes. I'm buying more silver but thanks for the info it was very Illuminating

  21. I very much appreciate your honest and well researched commentary. From your comments regards to silver supply, I see that you take into account bullion sales as a whole. When considering available silver in the investment market, there's ostensibly a bunch of strong hands. Once silver is sold as investment is unlikely to be traded into the fiat market. It's more likely to be utilized as "two party exchange" in the far future to never be seen on the monetary exchange market (corporate banks, if they exist).

    Fiat is dead but the autopsy has not yet been released; Silver value has been controlled not by the markets but by the banks. I'd like to see a response from Illuminati Silver , regards to silver supply, taking into account the (theoretical) major international investment holders which would NEVER trade silver for fiat.

    Of course, when the price of silver is dropping, as has happened lately, most serious investors (value protectors) will concede to the trend and look forward to a reversal point for reengaging in the uptrend. As long as the market accepts fiat for physical commodities, we don't care how low it goes, we always have some fiat socked away for adding to the stock of untouchables.

    IMHO There already exists the ability to utilize the bartering/sales of commodities using the block chain securely while utilizing third party arbiters. Another story/another time.

    Thanks in advance.

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