Silver Prices Seen Trending Lower

Bad news for miners like Penoles, which last week spun off its precious metals unit in a poorly performing IPO, comes in the form of a negative silver price outlook. “We expect silver prices to broadly track gold and the rest of the precious metals complex, but believe its fundamental outlook is likely to weigh on prices, exposing silver to further downside risk,” says Barclays. “The silver physical balance is set to post the largest surplus in over 20 years, in turn, increasing the call on investors to absorb the excess supply,” adds the shop in commodities note. Mine production is expected to ramp up, while industrial demand growth is not seen offsetting a decline in jewellery, photography and silverware. “Given the abundance of above-ground stocks, in our view, silver’s price trajectory is firmly in the hands of investors,” says Barclays. Silver prices are vulnerable to a change in investor sentiment.