Silver Price 2016: Lagging Gold, But For Much Longer?

By | March 12, 2016


Morgan Silver Dollar

Silver Dollar

Dateline March 12, 2016: Silver has done reasonably well so far in 2016, up about 13 percent. Gold, however, up almost 19% so far this year, has clearly outpaced silver price so far this year.  It has pushed the silver/gold price ratio out of whack, rendering silver a better relative value to gold,  and may give silver a better path forward for price appreciation for the remainder of the year.

Barron’s View of Silver Price 2016

silver quarter

Standing Liberty Quarter: Reverse

A recent article by Ira Iosebashvili in Barron’s highlights the silver-gold discrepancy and suggests that silver may be the better performer going forward. Here are some of the main points touched on in the article:

  • Just like gold, silver attracts investors as a hedge against uncertain times, turbulent markets, and rising consumer prices.
  • But, more so than gold, silver has many important industrial uses as well.
  • With global manufacturing in the doldrums, the demand for industrial silver has been depressed, and this has contributed to the relative lag in silver price so far in 2016.
  • Slowing growth in China could prompt authorities there to ramp up stimulus, a move that could boost demand for raw materials including silver as economies become stimulated.

Implications for the Silver Investor

1000 oz. Silver Bullion Bar

1000 oz. Silver Bullion Bar

The relative lag of silver versus gold makes silver the better value versus gold at this point in 2016. Two diverging trends can push silver prices up further:

  • Its safe-haven value as a precious metal should the global economies continue to sputter, or
  • It value as an industrial metal, should key global economies pick up steam.

Great values can still be had for investors looking to buy silver bars and bullion coins. Out preferred broker, Golden Eagle Coins, has plenty of silver in stock. Look to them for great prices and excellent service.

Suggestions for the Silver Coin Collector

Silver Mercury Dime Key Date

Mercury Dime Key Date

For the collector of pre-1965 US silver coins, there is sill tremendous value in this market. At the time of this writing, the silver melt value of a 90% silver pre-1965 Washington Quarter is $2.81 (Coinflation, Mar. 12, 2016). The silver value of these coins will rise if the Barron’s article’s point of view is correct.

Collectors can use this time to highgrade their collections of silver coins, perhaps adding higher quality coins, semi-key or key dates or graded coins to strengthen their collections. You can find excellent values for silver bullion coins at Golden Eagle Coins. For US and other silver coins minted for general circulation, be sure to consider eBay and Amazon for the best value for your money.

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