“Given silver’s large cyclical demand rooted in industrial applications, silver prices may respond more strongly than gold to building inflationary pressures,” Gold said.
Meanwhile, on the supply side, production remains constructed by lower capital expenditures by miners. Production has experienced year-over-year declines, and the trend may continue into 2018 given the depressed mining activity on current market supplies.
“A decline in mining capex may keep silver structurally undersupplied, while a normalization of inventories may also be price supportive,” Gold added.
As investors consider alternative assets to diversify a traditional portfolio, especially in extended bull conditions in the equities market, one may look to something like the ETFS Physical Silver Shares (NYSEArca: SIVR) to gain exposure to the silver market.
For more information on the silver market, visit our silver category.