"Peak Silver" Is About To Rock Markets And Bring Huge Profits To Smart Buyers

The takeaway here: Fully eight of the top 11 silver-producing nations have seen their production fall.

As we said earlier, supply would normally rise to meet higher prices. The average silver price was $15.68 in 2015, then rose to $17.14 in 2016. And yet, world silver production fell.

That's not a normal response, which suggests that 2015 may, in fact, have been the moment of peak silver production.

It's also true that, meanwhile, silver demand has fallen… but that won't last, either.

Global Industry Will Drive Demand Like Never Before

Physical silver demand has retreated in the last couple of years, but I don't think that's going to last.

Investors bought less silver coins and bars last year, I believe mostly due to the attraction of rapidly rising stocks and Bitcoin as alternatives.

Bitcoin has already been chopped in half from its $20,000 peak, and stocks have begun to fall apart over the past week or so, as indexes slid into "correction" territory.

There may yet be some gains there, but the bull's getting long in the tooth. In any case, as I'll show you, investors are likely to make a renewed flight to the safety that precious metals offer.

Jewelry demand was up slightly in 2017, with slower Chinese buying partially offset by stronger Indian and North American demand.

But industrial demand surged 3%, mostly due to rapidly expanding production in the solar industry.

I think the industrial sector will help drive stronger demand for silver in the next couple of years, as solar panels, automotive, and electronics continue to see strong gains.

Meanwhile, HSBC Bank has said it sees a potential for investors to seek protection in silver. James Steel, chief precious metals analyst for HSBC, said, "Any resurgence in risk may spark 'safe-haven' demand and aid prices." Steel also noted, "Tighter supply/demand balances are an important factor in our outlook."

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