Silver Price Likely to Keep Surging as Production Deficit Looms Overhead

JP Buntinx
July 29, 2020

During Q2 and Q3 2020, the silver price has seen a significant price. Many people wonder how long this situation will last. A dwindling supply coming out of Latin America certainly has the potential to keep this momentum going a while longer.

Silver Supplies are Drying up

It is interesting to see how the COVID-19 pandemic continues to disrupt the world’s economy, supply chains, and industries. Even precious metals dealers are facing a lot of pressure, primarily because it has become a lot more difficult to obtain silver as of right now. 

To put this into perspective, there is some supply-related trouble brewing in Mexico and Peru. Both regions are home to mining operations making up 40% of the global silver supply. Due to COVID-19, these mines were forced to either shut down or significantly reduce their output. 

Based on recent findings by the Silver Institute, it is very likely that a market deficit will occur for the first time in years. Mining efforts remain disrupted in the area, and there is no real improvement in sight. A long-lasting disruption can certainly fuel demand for silver even more, thus affecting the price in a bullish manner. 

It is expected there is a 13% decline in silver production from Latin America. This will, in turn, trigger a decrease in the yearly global silver supply by as much as 7.2%. Given the industrial use cases for this metal, as well as the current demand from investors, something will have to give. 

Bullish Silver Price News?

As the second wave of COVID-19 sweeps through the world, production of precious metals is likely to take another hit. Even the biggest operations will not be spared this time around. Not all regions are affected equally, however.

Some sources claim that Peru’s silver output should return to normal before the end of 2020. A lot of that outlook will depend on how the coronavirus situation evolves. Until a vaccine is developed, this uneasy situation may remain in place, up to a certain degree. 

Combined with negative interest rates looking to worsen, and ongoing financial uneasy in traditional markets, Q3 2020 will prove to be very interesting. No one really knows if the silver price surge will continue, but that appears to be a plausible scenario right now. Surpassing $25 will be a challenge, but it isn’t impossible.

Easily open your Swiss tax free gold vault in under 6 minutes

It’s Free to open a Swiss vaulting account, you can buy and sell gold directly to it instantly.

0 Comments

Trackbacks/Pingbacks

  1. The Many Use Cases for Silver Part I: Electronics, Energy, Soldering, Chemicals, Photography, Bar9, Simple Wealth Protection - […] Unlike gold and most other precious metals, silver has plenty of industrial use cases. More importantly, these use cases…

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Gold Bug Profile: Richard Russell

Back in 1960, Russell was the first to recommend gold stocks as an investment option, an assessment that has certainly put a bigger spotlight on that particular industry.

Wealth Diversification is Crucial, Especially During the Novel Coronavirus Outbreak

Putting all of one’s eggs in the same basket during a time like this is virtually the same as throwing money out the window.

Welcome To The New Bar9 Rebranding

To all Bar9 customers, I'm proud to announce the rebranding of Bar nine and a whole new informative front end. As we move into 2020 Bar9's mission is to make it easier for anyone to move in and out of physical hard assets and become a little more bank independent. The...

Silver Bug Profile: Adam Hamilton

Most mining operations have very mixed – and primarily disappointing – results in Q1. That has not affected the price of silver in a negative manner.

Gold Bug Profile: Doug Casey

The name Doug Casey will ring a bell with financial buffs due to his 1979 book. Titled “Crisis Investing”, it quickly rose the ranks to become the number one The New York Times Non-Fiction Best Seller in 1980.

Silver Bug Profile: Rick Rule

When it comes to the silver market, Rick Rule hasn’t shied away from expressing his sentiment at certain times

Gold Bug Profile: Ned Naylor-Leyland

During an interview with Morningstar, Ned confirmed that he remains very bullish on gold for the foreseeable future. He even claimed that there is a good chance to see the gold price move higher, although Ned doesn’t offer potential price targets.

Gold Bug Profile: Judy Shelton

It is interesting to note that Judy Shelton may join the Federal Reserve Board of Governors in the near future. Assuming that will be the case, some very interesting things are bound to happen in the near future.

Unveiling the System Behind the IMF Lending $50 Billion to Member States Fighting the Coronavirus

Currently, it has yet to be determined which options will be explored by the different member states. There is no such thing as free money, not even during a coronavirus outbreak.

Gold Bug Profile: Alan Greenspan

There are many pathways in life which can influence the future of one’s existence. For Alan Greenspan, one pathway of particular influence is called Objectivism.

Gold and Silver Bounce Back as Stock Markets Continue to Struggle

Although the markets aren’t out of the woods yet, things are looking better. There is some positive momentum all around, for a change.

Where is the Best Place to Buy Gold Online?

As far back as Ancient Rome, prospectors would sit aside streams swilling water in pans with the hope of glimpsing the yellow metal. Even today, you can still get your hands on gold in this way, but buying online through a broker is your best bet for a secure, cheap...

Silver Bug Profile: Jeff Clark

Over the past decade and a half, Clark has put the majority of his focus on analyzing the precious metals mining industry. BIG GOLD by Casey Research, a world-renowned publication, has been one of his outlets.

CME Increases Margin for Silver Futures Contracts due to Expected “Larger-than-Normal Price Swings”

The recent margin changes by CME paint an interesting short-term future for silver. Raising the margin requirements seems to be a sign for shorters to not go against the grain right now.

Silver Bug Profile: Keith Neumeyer

Keith indicated that there would be a new bull market for all precious metals in the next few years. So far, 2020 has proven that sentiment correct, although $130 remains a lofty silver price target.

Gold Bug Profile: Eric Sprott

It is also worth noting that Eric Sprott sold his first company – known as Sprott Securities – back in 2011. Interestingly enough, the company was purchased by other staff members.

Gold Bug Profile: Crispin Odey

Over the years, the name Crispin Odey was often named in association with gold and other precious metals. Particularly during the coronavirus crisis, Odey expected the value of gold to move up again.

Gold Bug Profile: Ewan Downie

Since leading Premier Gold Mines Limited since 2006, the company has gone through major growth. Its stock is also trading publicly, further validating its approach to gold and silver.

Gold Bug Profile: Ben Davies

Ben Davies is the co-founder and CEO of Hinde Capital. Founding this company came after building up over a dozen years of experience in financial and commodity markets.

Where to Store Gold: Switzerland vs America

Savvy investors will already choose physical gold to avoid the counterparty risk of futures accounts, ETFs, and other forms of paper gold. But the jurisdiction of gold storage represents another, often overlooked counterparty risk.  When disaster strikes and the...

Translate Blog Post

Article Categories

Blog Stats

  • 112,976 hits

Follow the CEO on Twitter

%d bloggers like this: