Research Team at Bank of America Merrill Lynch suggests that the silver has bottomed out after a prolonged period of price declines and in their view, the worst is behind for silver, with prices between $15/oz and $20/oz justifiable.

Key Quotes

“Silver prices could fall only if investment demand declined yet again. We reinforce our more constructive view on silver as fundamentals have steadied. Digging a bit deeper, we acknowledge that it is challenging to model silver market balances because several sectors, including scrap supply and jewellery demand, are price-sensitive, i.e., forecasting those is generally only possible once a price level has been set.”

“As such, we look at the silver market differently to the base metals and, assuming that investors are the marginal buyers, we ask how strong non-commercial demand needs to be to balance the silver market at $15/oz, $20/oz and $25/oz (aggregate investment can be positive or negative). In case it is negative, this can reflect either dis-investment, i.e., investors selling the silver they have accumulated; alternatively, in our model, it can also reflect a shortage of scrap and mine supply, i.e., shipments necessary to balance the market. We aggregate coin/ bar purchases, inflows into ETFs, silverware and implied investment under aggregate investment.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

AUD/USD drops following higher than expected Aussie Unemployment Rate

AUD/USD fails to cheer an increase in Employment Change. The pair declines to 0.6678 after flashing the intra-day low of 0.6668 as Australia’s employment data disappoints Aussie traders on early Thursday.


USD/JPY bulls catch a breath near multi-month top, stays above 111.00

USD/JPY seesaws around 111.30 at the start of Asian session. The risk barometer surged to the highest in nine months the previous day as Chinese authorities manage to placate traders. The pair consolidates gains following FOMC minutes.


Gold: Pulls back amid overbought RSI, multiple upside barriers ahead

Gold prices decline to $1,606 during the early Thursday. The yellow metal surged to the highest since March 2013 the previous day but failed to hold onto gains due to the overbought RSI conditions.

Gold News

WTI upside remains capped by $53.00 ahead of API

WTI oil stays upbeat, following the run-up to the monthly high before a few minutes, as taking rounds to $53.70 amid the initial Asian session on Thursday. The black gold recently benefited from the weekly inventory data from the API.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info