Is silver destined to outperform gold in 2020? The next year may be forecasted to be uncertain and tremulous, amid the global trade war, recession threats, Brexit, and negative bond yields.
Investors will be keeping a close eye on such factors that could greatly impact their investment decisions in 2020. The U.S.-China trade war could also be a significant driver to silver potentially outperforming gold in the next year.
Both gold and silver metals experienced their share of highs and lows in 2019. Spot gold rose around 19% and silver advanced 16.9% during the last 12 months. Standard Chartered’s precious metals analyst Suki Cooper stated that for silver trade negotiations are one of the vital factors. She added that they expected the Federal Reserve to remain on hold, but there would likely be continued concerns around the U.S.-China trade negotiations.
In 2020, silver prices are expected to trade around $18 an ounce, and most of the gains are set for year-end. RJO Futures senior market strategist Phillip Streible projects silver to close around $17.50 an ounce next year. Strategists at TD Securities highlight silver’s potential peaking at around $20 an ounce in 2020. The bank’s strategists stated that silver could jump to $20 per ounce by the end of 2020 in response to its firming fundamentals and spill over investment demand from gold. Experts state that the white metals technical picture going forward looked neutral, and would neither favour the bulls nor the bears.
In 2019, one of the concerns with the white metal has been its underperformance in comparison to the yellow metal. With the countdown to the upcoming year, expert analysts reiterate their optimism on the white metal in comparison to the yellow metal. However, highlighting the lack of tactical positioning in the white metal, Standard Chartered’s Cooper, stated that the white metal might fail to outperform gold in 2020. She added that risks included industrial demand and potential liquidation of ETF holdings.
The CPM Group recommended a very rare silver buy call. The group issued an intermediate-term silver buy recommendation for investors in December, stating that the white metal was at a critical vertex at present. The white metal prices are likely to rise than fall in the next few years, explained CPM. CPM Group’s vice president in charge of research Rohit Savant stated that they expected the market to avoid the long period of net investor silver selling and low prices that followed from that year. The group defined its intermediate timeline highlighting it between two and three years.