Is Silver Setting the Stage for a Breakout?

Despite slowing down, the frenzy around silver has kept prices up, and demand for physical bars and coins strong, while doubts over the state of the silver stocks emerge. Is Silver Setting the Stage for a Breakout?

Looks like it.

Let’s list some facts:

Fuelled by a Reddit-induced buying frenzy, silver prices reached an eight-year high in February. Although that rally has slowed, demand for silver coins and bars remains strong.

A fresh survey published by The Silver Institute predicts a 33% climb in silver prices in 2021 to an average annual price of $27.30 per ounce.

And it seems like some investors are already preparing to profit from the potential price increase:

• A precious metals dealer from Singapore is building a vault capable of storing 15,000 tons of silver.
• The London Bullion Market Association (LBMA) said that, as of the end of March, a record stock of silver was stored in London vaults, representing an 11% percent increase from the previous month, or approximately 1,259,310 silver bars.

Will the silver frenzy strike again? We don’t have a crystal ball to say so. 🔮

But in a recent joint report with Metal Focus, The Silver Institute made a worrying observation about the silver frenzy from earlier this year:

“Had demand in iShares [Editor’s note: here, paper silver] continued at the frenetic rate of late-January/early February it would only have been a matter of weeks before London’s existing stock was used up. […] Given that most of this metal was allocated in London, fears emerged as to whether there was enough silver should demand continue at this pace.”