• Gold: $ 1,282.61
      Silver: $ 15.43
      Platinum: $ 804.22
      Palladium: $ 1,356.29

    • Gold: $ 1,282.61
      Silver: $ 15.43
      Platinum: $ 804.22
      Palladium: $ 1,356.29

Precious Metals * Private Vaulting * Refinery

4 Reasons Silver Could Break Higher in 2016

4 Reasons Silver Could Break Higher in 2016

Silver prices fell from nearly five-month highs Thursday, after the Federal Reserve put December firmly on the table as a possible timeline for raising interest rates. Although a rate hike will weigh on non-yielding assets such as precious metals, silver’s industrial demand could lend support to the grey metal next year.

Silver closed at $16.29 US per troy ounce on Wednesday, its highest level since June 3. As of Friday it was trading at $15.57 per troy ounce on the New York Mercantile Exchange. Silver prices have nearly broken even in 2015, having rallied 10 percent from a five-year low of $14.08 on August 26.

Analysts are speculating that silver prices may be poised to break higher next year due to a combination of factors.

  1. Industrial demand

In addition to its investment and jewelry appeal, silver serves a massive industrial function as well. The industrial sector accounts for roughly 56 percent of the entire demand for the grey metal, equivalent to 595.9 million ounces, according to the Silver Institute. At the same time, there’s evidence that silver production is collapsing, as low prices give miners less incentive to produce high volume.

  1. Global recovery and monetary policy

Although the global economy is struggling, growth is expected to pick up next year. According to the International Monetary Fund, global growth will reach 3.6 percent in 2016, up from 3.1 percent this year. Recoveries are expected to continue in emerging as well as advanced industrialized nations. To expedite the process, central banks are planning to expand their stimulus programs. Chief among them are the People’s Bank of China, Bank of Japan and European Central Bank.

So while the United States is expected to begin raising rates, it will likely be the exception to the norm in 2016. The continuation of accommodative policies around the world could lead silver prices higher next year.

  1. Investor demand

Discount prices have led to a surge in physical silver demand. The US Mint alone has sold 39 million ounces of American Silver Eagle coins this year alone. Sales are expected to easily outpace the 2014 sales total of 44 million announces.

Byzantium has also expanded its silver coin and silver bar inventory to meet growing demand.

  1. Stock market overvalued

With the bull market in its sixth year, analysts and investors are becoming more convinced that the stock market is overvalued, especially in the United States. Using a method of valuation made famous by Warren Buffett, which compares the value of a country’s stock market to its annual economic output, the US and British stock markets are likely overvalued. (In other words, their stock markets are worth more than 100 percent of their annual economic output.)


While there are too many variables to say for certain whether silver prices are poised to break higher, these four factors suggest that a turnaround may occur in 2016.

Husni “Sam” B, Byznaitum International Ltd SEZC


O: +1 345-815-2757


PO Box 2154, Grand Cayman, KY1-1105, Cayman Islands.

Email: info@byzantium.ky

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