Is silver set to double?

Silver has rallied strongly in the past twelve months, with the precious metal rising by more than 25% in the year to mid-August.

This continues a period of strength that dates back to 2018, which is when the silver market went into deficit, with silver prices almost doubling since then.

This is something we addressed in our recent ABC Bullion market exclusive; “The Case for Silver: A Sterling Investment” which looked at all the factors driving investors toward silver today.
Last week, we saw yet another sign that the price strength in silver may have much further to run, with market participants current view of monetary policy suggesting we are in the perfect environment for precious metals to rally.

The chart below, which comes from the Bank of America Global Fund Manager Survey shows the percentage of surveyed fund managers that think global monetary policy is too restrictive.

The current percentage of fund managers with this view is at its highest level since 2008.

Other peaks in this data series occurred in:

• April 2001

• October 2008

• March 2020.

While all those periods had their differences, history suggests one thing was the same across them all.

And that is that those periods proved to be excellent buying opportunities for precious metal investors, with the table below showing the average 1-year and 3-year returns for both gold and silver in the periods that followed.

Source: ABC Bullion, LBMA

If history is any guide, do not be surprised if gold rallies strongly in the period ahead, while silver could more than double.

If you would like to discuss the investment case for silver, please call the ABC Bullion sales and client service team on 1300 361 261 between 8.30am to 6pm Mon Fri AEST or Saturdays between 10am to 3pm AEST.

Jordan Eliseo
General Manager
ABC Bullion Australia

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