Will Silver and Palladium Follow the LBMA Conference Projections?


Oct. 21 2015, Published 10:54 a.m. ET

Bullish on silver

As we’ve seen predictions for gold and platinum in the previous article, we’ll now discuss silver and palladium price movements. Surprisingly, given the low gold price prediction, silver has a comparatively positive outlook.

The LBMA’s (London Bullion Market Association) forecast figure for silver stands at $18 per ounce. The current price for silver is around $15.90 per ounce. According to the predicted figure, silver may surge close to 13% by next year. Silver has gained close to 4.3% on a trailing-30-day basis. Above is a chart that shows the price performance of silver for 2015.

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Palladium may shine

The gold-to-silver ratio, which measures the number of silver ounces required to buy one ounce of gold, may be substantially affected by rising silver prices. If silver becomes comparatively stronger, we may see the gold-to-silver ratio plunge to lower levels.

Palladium has been the worst performer in the current year, falling about 13% on a YTD (year-to-date) basis. Despite its current fall in price, experts at the conference predicted a rise. The price may reach $844 per ounce in the coming year. Currently, palladium has a trading range from $670 to $700 per ounce.

The probable rises in silver and palladium may buoy mining companies. Mining ETFs such as the Global X Silver Miners ETF (SIL) and the VanEck Vectors Gold Miners ETF (GDX) may also experience significant price changes with changes in the price of gold.

Mining companies that may benefit due to rising silver prices include Pan American Silver (PAAS), First Majestic Silver (AG), and Hecla Mining Company (HL). These three stocks make up 3.7% of the VanEck Vectors Gold Miners ETF.


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