Summary

  • Silver appears undervalued particularly relative to gold.
  • The price of silver should rise in conjunction with gold as the fundamentals for precious metals improve as the Trump trade fades.
  • These fundamentals include growing economic and geopolitical uncertainty globally.
  • Conversely because of its dual use as an industrial metal, demand will grow if Trump’s fiscal policies spark greater economic growth.
  • Silver is expected to record another supply deficit in 2017, causing prices to rise as demand grows.

Despite the recent plunge in precious metals Seeking Alpha remains bullish on the long-term outlook for silver, particularly relative to gold. In fact, the recent decline in silver which sees it down by 10% over the last two-months provides long-term investors with a handy entry point to the lustrous white metal.

You see, silver unlike gold possesses a range of virtues that should see it perform even in an environment that would traditionally be considered to be adverse for precious metals. More specifically, silver is well positioned to benefit from a stronger economy because of its considerable utility and demand as an industrial metal.

If the economy weakens or there is another crisis, silver will also benefit because of its perceived status as a precious metal and safe-haven asset. This allows investors to hedge their bets in both directions.

Nonetheless, there are signs that silver will continue to perform strongly and offers considerable upside to investors.

Source: Seeking Alpha

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