– 2015 Silver Forecast: One of the Best Long-Term Opportunities (Video) (SchiffGold, April 29, 2015):
John Whitefoot, an Analyst with Lombardi, shares his 2015 silver forecast. Unlike many investors, Whitefoot expects silver prices to rally, catching markets by surprise. He points to three important factors: The S&P 500 is overvalued by 65%, indicating the stock market is in a bubble that will pop soon. Silver has industrial demand that allows it to thrive during periods of economic growth. Supply problems paired with huge demand will drive prices higher.
Perhaps the only point our Chairman Peter Schiff would disagree with is that the US economy is going to continue to improve in the coming years. Nevertheless, the case for silver prices rising significantly this year and into the future remains. Many of Whitefoot’s arguments are also explained in detail in our free special report – The Powerful Case for Silver. Download it here.
Follow along with this transcription:
“Silver’s not really on anyone’s radar right now. Currently trading at around $16.50 an ounce, silver prices are down roughly 70% over 2011 highs of over $50 an ounce. On top of that, most analysts expect silver prices to average around $13 an ounce in 2015. If so, that would represent a record fourth consecutive year of declines. It’s not a big surprise to hear that investors are shunning precious metals like silver and gold. For the most part, investors only pay attention to precious metals like silver and gold when the stock market is performing poorly.
“But the fact of the matter is there are a number of catalysts that actually point to a rebound in silver prices going forward. At current levels, silver is probably one of the better long-term investment opportunities out there right now.
“First, in March 2015, the bull market in stocks celebrated its 6th anniversary. Thanks to the Federal Reserve and its generous bond-buying program and monetary policies and artificially low interest rates, the S&P 500 soared over 200%. Unfortunately, the long-in-the-tooth bull market isn’t the result of consistent earnings and revenue growth. Yes, earnings are up, but it’s at the same time while revenues are down. It’s more of a result of aggressive share buy-back programs.
“On top of that, with interest rates hovering near zero, the stock market is really the only game in town for income-starved investors. Eventually though, investors are going to have to actually pay attention to underlying fundamentals. When the mis-guided exuberance of the stock market finally sees the light of day, investors are going to be in for a real shock. That’s because the S&P 500, according to the Kate PE Ratio, is overvalued by 65%. The last time evaluations were this high was in 1929 and 1999, just before the dot-com bubble burst. Eventually the stock market will correct. And when it does, investors will flock back into silver.
“Second, while silver and gold thrive on economic uncertainty and geopolitical tensions, silver is the only one that benefits from an improving economy. While the stock market is wildly overvalued, the fact of the matter is the US economy is on pretty solid ground, and is project to grow around 3.5% this year and the same next year. At the same time, emerging and developing economies are projected to grow around 4.5% over the next two years. This is, of course, in sharp contrast to the economic downturn that is happening in the eurozone, Japan, China, and of course, Russia.
“In addition to being used as a hedge against economic uncertainty, silver also has a number of industrial uses. That includes nanotechnology, medicine, the auto industry, batteries, electronics, and even green technologies like solar energy and water purification. Keep in mind, silver was in great demand during the manufacturing boom before the financial crisis in 2008. Going forward, silver prices could climb on increased demand from a manufacturing powerhouse like the United States. Silver prices will climb higher when other manufacturing giants like China, Japan, and the eurozone rebound.
“Lastly, silver prices could also increase based upon a number of supply and demand issues. For example, production of silver from mines in Canada, a major silver-producing country, have collapsed. It’s kind of a catch-22 situation. With silver prices so low, miners have less incentive to increase their production levels. At the same time, demand remains strong for silver in India and China, the world’s two largest consumers. Here at home, sales of Silver Eagle coins set a record in 2014. In fact, sales of the Silver Eagle coin outpaced demand for both platinum and gold coins.
“Taken together, I think silver prices will surprise investors to the upside in 2015.”
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