Q: With China added governmental approvals for silver export how do you see the price of silver responding? Thanks.
5i Research Answer:
The move is interesting, and the US has also designated silver as a critical metal. Both actions should be positive for prices going forward. But the underlying issue remains: silver production has not met demand for many years now. This year's move of course has reflected this, plus the lower US dollar, plus silver's growing use in AI applications. This week's frenzy is related to short covering and margin-forced selling, as well as CME new margin requirements. But as long as rates go down and production does not meet supply we think the price will continue to tick up. We would not expect 150% gains next year but we do think the positive momentum is set to continue.