The “2016 silver bull-run” is NOT over yet... And here are two reasons why

by , 20 September 2016
The “2016 silver bull-run” is NOT over yet... And here are two reasons why
Since the start of 2016, Silver rose from $13.82 an ounce to a high of $20.63 - an incredible 49% return!

Compare that to gold which is up around 25% and the JSE All Share which has returned just over 6% for the year.

So it's no secret that silver is one of the best performing assets in 2016. But recently, silver took a knock and it's sitting around $18.85 today.

The main factor that caused silver to fall was fears of another US interest rate hike. You see, the silver price falls when interest rates go up as investors flee safe-haven assets to yield-bearing investments.

But the good thing is, if silver dives further to around $17.50-$18, then it's will be the best time to buy again.

Despite the fears of a US interest hike, there are two solid reasons why silver is poised to burst past $20 and even push closer to $23 by the end of 2016.

Let me explain…
 
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Two drivers that could see the price of silver soar by the end of 2016
 
#1: Investors are piling into Silver ETFs as global growth weakens

 
The demand for safe haven assets like silver and gold continue to increase as central banks around the world embark on quantitative easing programs in an effort to stimulate their ailing economies.
 
For example, some countries like Japan, Sweden, Denmark and the EU have implemented negative interest rates. Basically this means people are paying the bank to keep hold of their money, which makes no sense.
 
What’s more, the International Monetary Fund (IMF) reduced its global growth estimate for this year and in 2017 by 0.1%, putting economic growth for 2016 at 3.1%.
 
This uncertainty has created an environment in which safe haven investments like silver are desirable.
 
In fact, Silver ETFs saw inflows of 361 tonnes in August - Their highest inflows since March. With the exception of January, silver holdings have been increasing every month so far this year.
 

#2: Silver coin sales - On their way to soaring to new highs

 
During the past few years of low interest rates in the world, there has been a tremendous uptick in the amount of silver coins that have been sold by the US Mint, Royal Canadian Mint, and other retailers.
 
Why?
 
Well when both silver or paper money pay you zero percent interest, you should prefer silver over paper. That’s why there has been a surge of silver coin sales.
 
 
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Silver coin sales are on pace to set a record this year. Sales of 2016 American Silver Eagles during the first half of 2016 totalled 26.2 million coins. That was 20.5% higher than the 21.7 million coins delivered through the first half of 2015.
 
This month’s coin sales started strong too. Silver coin sales totalled 552,500 ounces during the first week of September, up from 432,500 ounces in the previous week.
 

How South Africans can play the “2016 silver bull-run”


If you want to invest in silver, you can buy physical silver bars or coins from silver retailers and store it like you would gold. Or you can cut the hassle of owning physical silver and invest in a low-cost instrument like an exchange-traded note (ETN).
 
A Silver ETN tracks the performance of the silver price in dollars. You get the full benefit of investing in silver without having to own the physical metal.
 
The good news is, two South African Silver Exchange-Traded-Notes (ETNs) are soaring in 2016, up 37% and 41% in just one year.
 
You can buy these ETNs usually through your broker today!
 
The massive demand for silver coins and investments into silver ETFs are just two solid reasons why silver could rise to the $23 mark.
 
Knowledge brings you wealth,


Joshua Benton, Real Wealth
 
P.S. Just like silver, gold is the ultimate hedge against economic and political volatility. That’s why we’ve updated and published the 2016 edition of The Gold Report – you’ll discover everything you need to know about buying and holding gold.

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