At a time when gold prices are reaching new highs, the silver market is also starting to gain traction. Otavio Costa, macro strategist at hedge fund Crescat Capital, said silver may be entering a supercycle and is poised to challenge the all-time high of $50 an ounce set in 2011. Silver is catching up with gold, Costa noted in an interview with Benzinga. He believes that silver's long-term relatively weak performance is about to reverse, especially since the current market environment is similar to past boom cycles, which means that a new bull market may have started. Pure market observation, not investment advice.
The tight solar energy market and surging demand are driving up silver prices.
Since early June, silver prices have risen by more than 10%, reaching $36.80 on Monday, a new high since 2012. The current price is $36.42, and the increase over the past year is approximately 24.8%. Costa believes that silver is at a critical turning point, as the supply side lacks new mineral discoveries, while the demand side is experiencing structural changes due to the rise of the green energy industry.
Costa stated that the demand for solar panels is rapidly increasing, with the solar industry now accounting for 15% to 17% of global silver demand, a significant increase compared to the single digits a few years ago, reflecting the impact of energy transition on the silver market.
The opportunity for silver prices to reverse and rise has arrived.
Costa particularly pointed out that the difference in the Gold-Silver Ratio is expected to bring a reversal opportunity for silver. Currently, the trading price of silver per ounce is a hundred times that of gold, and analysts estimate that silver has more room for growth. Costa stated that silver prices will experience a sharp rebound.
Costa believes that silver is transitioning from a purely industrial metal to a monetary asset, similar to the hedging function of gold. Once prices start to rise, silver will no longer be just an industrial metal but will become a monetary metal.
The key threshold is 50 dollars.
The next important technical resistance level for silver prices is at $50, a level that was touched during the market manipulation events of the Hunt Brothers in 2011 and 1979 (( Note 1). Costa emphasized that once this threshold is breached, silver will enter the "price discovery phase," making subsequent price increases difficult to predict. He stated that after breaking $50, it will be a whole new price range.
Chinese buyers are paying a premium for physical silver.
Costa noted that the physical silver market is also showing signs of anomalies. Over the past 6 to 12 months, Chinese buyers have generally been willing to pay a premium of $1 to $3 per ounce for silver concentrate. This physical premium is beginning to be reflected in futures prices, indicating that the imbalance between supply and demand in the market is increasing.
Crescat Capital owns the world's largest silver mine, San Cristobal, and its investment trends in silver are attracting significant market attention.
Note 1: The Silver Thursday incident in 1979 when the Hunt Brothers manipulated silver.
Between 1979 and 1980, the Hunt brothers, Texas oil tycoons in the United States, attempted to monopolize the market by aggressively buying physical silver and futures contracts, causing the price of silver to soar from $6 per ounce to nearly $50. This crazy rally alarmed regulators, and finally in March 1980, due to the failure of margin calls, the price collapsed by more than 50%, known as "Silver Thursday", which shocked global financial markets and prompted the United States to strengthen the regulatory system of commodity markets.
This article Wall Street hedge fund analysts: Silver enters a super cycle and is about to challenge the breakthrough of 50 USD. First appeared in Chain News ABMedia.
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Wall Street Hedge Fund Analyst: Silver Enters Super Cycle and is About to Challenge the $50 Mark
At a time when gold prices are reaching new highs, the silver market is also starting to gain traction. Otavio Costa, macro strategist at hedge fund Crescat Capital, said silver may be entering a supercycle and is poised to challenge the all-time high of $50 an ounce set in 2011. Silver is catching up with gold, Costa noted in an interview with Benzinga. He believes that silver's long-term relatively weak performance is about to reverse, especially since the current market environment is similar to past boom cycles, which means that a new bull market may have started. Pure market observation, not investment advice.
The tight solar energy market and surging demand are driving up silver prices.
Since early June, silver prices have risen by more than 10%, reaching $36.80 on Monday, a new high since 2012. The current price is $36.42, and the increase over the past year is approximately 24.8%. Costa believes that silver is at a critical turning point, as the supply side lacks new mineral discoveries, while the demand side is experiencing structural changes due to the rise of the green energy industry.
Costa stated that the demand for solar panels is rapidly increasing, with the solar industry now accounting for 15% to 17% of global silver demand, a significant increase compared to the single digits a few years ago, reflecting the impact of energy transition on the silver market.
The opportunity for silver prices to reverse and rise has arrived.
Costa particularly pointed out that the difference in the Gold-Silver Ratio is expected to bring a reversal opportunity for silver. Currently, the trading price of silver per ounce is a hundred times that of gold, and analysts estimate that silver has more room for growth. Costa stated that silver prices will experience a sharp rebound.
Costa believes that silver is transitioning from a purely industrial metal to a monetary asset, similar to the hedging function of gold. Once prices start to rise, silver will no longer be just an industrial metal but will become a monetary metal.
The key threshold is 50 dollars.
The next important technical resistance level for silver prices is at $50, a level that was touched during the market manipulation events of the Hunt Brothers in 2011 and 1979 (( Note 1). Costa emphasized that once this threshold is breached, silver will enter the "price discovery phase," making subsequent price increases difficult to predict. He stated that after breaking $50, it will be a whole new price range.
Chinese buyers are paying a premium for physical silver.
Costa noted that the physical silver market is also showing signs of anomalies. Over the past 6 to 12 months, Chinese buyers have generally been willing to pay a premium of $1 to $3 per ounce for silver concentrate. This physical premium is beginning to be reflected in futures prices, indicating that the imbalance between supply and demand in the market is increasing.
Crescat Capital owns the world's largest silver mine, San Cristobal, and its investment trends in silver are attracting significant market attention.
Note 1: The Silver Thursday incident in 1979 when the Hunt Brothers manipulated silver.
Between 1979 and 1980, the Hunt brothers, Texas oil tycoons in the United States, attempted to monopolize the market by aggressively buying physical silver and futures contracts, causing the price of silver to soar from $6 per ounce to nearly $50. This crazy rally alarmed regulators, and finally in March 1980, due to the failure of margin calls, the price collapsed by more than 50%, known as "Silver Thursday", which shocked global financial markets and prompted the United States to strengthen the regulatory system of commodity markets.
This article Wall Street hedge fund analysts: Silver enters a super cycle and is about to challenge the breakthrough of 50 USD. First appeared in Chain News ABMedia.