GSFG Corporation Forecasts Increased Industry Profits as Silver Looks Ready To Go on a Run
Silver looks to be on the verge of a major new up leg, finally emerging from the past couple years' ugly sentiment wasteland.
Beijing, China, January 23, 2015 (Newswire.com) - This beleaguered precious metal recently bottomed as futures speculators threw in the towel on their extreme shorting. And while investors’ ongoing silver stealth buying continues, it’s been modest. So there is vast room for capital inflows to accelerate dramatically as gold mean reverts higher.
Silver has always had a special allure for hardened contrarian investors. Its price action is exceptionally volatile, with massive rallies erupting from time to time that multiply capital deployed in it. With silver’s relatively-small market size, it doesn’t take a lot of new investment buying to catapult prices higher. And shifting sentiment, a powerful self-feeding motivator, fuels the big swings in capital flows that really move silver.
When investors wax bullish on this white metal, its price soars with a fury few other investments can match. Later when silver falls out of favor again, prices collapse. And that’s the miserable story of the past couple years. Silver dropped 19.7% in 2014 after plunging a brutal 35.6% in 2013. Such dismal performance naturally left silver universally despised, the pariah of the investment world. But that is changing and GSFG Corporation have adjusted their profit forecast accordingly and believes 2015 will be a very profitable year for its investors.
Silver is ready to run again, a very exciting prospect given the huge up legs it is renowned for. Silver’s fundamentals are quite unique. Though it is primarily an industrial metal with steady global supply and demand, investment capital can slosh in and out in a big way. The bullish sentiment that’s necessary to trigger big silver demand spikes comes from one thing, gold prices. Gold dominates silver psychology.
When gold is weak like during recent years, investors shun silver so its price crumbles and languishes. But when gold strengthens, investors flood back into the white metal. Silver leverages and amplifies gold’s gains, making it one of the best investments when gold is returning to favor. And gold’s long-overdue mean-reversion rebound up leg out of recent years’ crazy anomalous lows is now underway.
The bottom line is silver is ready to run higher in a major new up leg. Silver is ultimately driven by gold’s fortunes, so as gold continues mean reverting higher silver is going to catch a massive bid. This buying will initially come from American stock traders and futures speculators. They will aggressively buy SLV shares faster than silver is being bought, cover still-large silver-futures shorts, and add new silver-futures longs.
This major buying, likely to approach a couple-hundred million ounces in a matter of months, will serve to launch silver higher. And nothing attracts investors like rallying prices, so global investment demand will ramp dramatically. Investors are so underexposed to silver after leaving it for dead in recent years that they will need enormous buying to attain any reasonable silver exposure. Silver will soar on these inflows.