Published On: Fri, Apr 1st, 2016

Richard Warke Sees Silver Lining in Precious Metals

The year began with a great deal of momentum in the precious metals sector. With gold having its best start since the 1980s, experts also believe the year will bring an increased demand for silver.

Despite closing the day on Tuesday down $1.10 and $0.24 respectively, gold and silver are doing well this year, particularly gold, which reached 21.8 percent since its December low last year. This rapid ascent prompted analysts to announce gold’s movement into bull market territory for the first time since 2013.

The 20 percent growth in the price of gold can be attributed to a number of factors.

Photo/ Rob Lavinsky via iRock.com

Photo/ Rob Lavinsky via iRock.com

Uncertain times in financial markets have triggered investment demand for assets with safe haven characteristics,” said Georgette Boele, a strategist at ABN AMRO. “Second, lower US Treasury yields are increasing the attractiveness of gold and other precious metals as gold doesn’t pay a coupon or dividend.”

In early March, Bart Melek, head of commodity strategy at TD Securities, indicated to Kitco that gold looks set to hit his firm’s Q1 price target of $1,300. “There are many reasons to think that gold will rally to $1, 300,” Melek said.

Silver, which is closely tied to the price of gold, is having a more mild start, but is expected to pick up pace.

“Silver is a more and more versatile commodity than gold given its widespread use in the industrial sector. The two precious metals track each other quite closely, however. So, given the current popularity of gold and record high investments in gold ETFs, silver should also have a positive year,” notes mining executive, Richard Warke, who leads Arizona Mining Inc.

Richard Warke, who has previous experience in the silver sector, also pointed out that, “It’s likely that silver will continue to gain momentum this year.”

Despite the heights gold has hit in the past 90 days, experts are advising investors to think long term with analysts believing silver will turn out to be the better investment option.

“Historically, we are in an area of gold outperformance over silver that is not sustainable,” macro strategist Larry McDonald told CNBC. “We’re at extremely, extremely lofty levels in terms of outperformance, and I think the risk/reward is much better here to be long silver and short gold over the near term.”

Others believe silver will dip as economies fluctuate. However, they see silver ending the year strongly and advise investors to buy during these brief declines and go long.

The worst is over for silver, but it doesn’t mean the downturn is completely over,” writes Wealth Daily’s Geoffrey Pike. “Use your cash to dollar-cost-average into silver in the latter part of 2016.”

In February, Money Morning forecasted international silver demand to grow to a record $158 billion globally over 2016. If the market trend predictions come to fruition, it will be a great year for both gold and silver investors.

Author: Jeffrey Wheeler

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