Silver to bounce back rally likely in coming months

By in Bullion on May 31, 2012

NEW YORK : There is a lot of speculation that silver will rebound from lower levels in the coming months. The speculation comes as analysts predict that manufacturing will expand in key economies like China and USA which will likely boost the demand for the metal.

Some analysts believe that the price of silver will rally in coming months:

According to Charles Nenner, noted market forecaster, silver is set to scale new highs in next 12-18 months.

It’s almost time to get bullish again,” Nenner says, “about two weeks or so.” From there, he’s looking for a move to all-time highs, and possibly beyond. Silver is going back to $ 50 but “that doesn’t mean $ 50 has to be the end.”

According to Stephen M Smith, the managing member at Smith McKenna, silver is likely to reach new highs in coming months as global mining production strains amid increased demand.

“Key global factors look on par to stimulate silver price to higher levels as unemployment is on the decline, manufacturing demand is up, and economic growth is in order with GDP up 2.2%,” he added.

According to Ross Norman, CEO of Sharps Pixley, silver prices will double within five years.

Ross Norman forecast $ 100 an ounce for silver by 2017. “Negative real interest rates were the reason for high silver prices cited by most experts. In short inflation is higher than the cost of money so cash on deposit is losing money,” he added.

According to Philip Klapwijk, Global Head of Metals Analytics at Thomson Reuters GFMS, Silver is poised to rally in the second half of this year.

Silver prices are probably going to head higher in the second half of 2012 and we could see a push above $ 40 at some point,” though silver is unlikely to sustain those price levels he said. “I don’t think silver has the same get up and go that it did last year.” He added.

According to the The Silver Institute report, silver outperformed all other metals in the first three months of 2012, it has practically doubled in value since 2010; making it the emergent king for investors.

The all-time high price for silver in January 1980 of $ 49.45 an ounce still has not been hit since 1980, including in terms of inflation-adjusted dollars. Based on December 2011 CPI-U inflation, the 1980 silver price peak would be $ 144 an ounce.

With demand still high for silver — particularly in Asia — this metals could hit those highs in the next 12 to 24 months.

As of 1.07 a.m EST On Thursday, July silver, which is most active contract, declined by 0.083% to $ 27.90 an ounce on the Comex division of the New York Mercantile Exchange.

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