Precious Metals Outlook 2016

Some analysts say silver's saving grace in 2016 could be improved global economic growth. As economic conditions improve, industrial demand for silver will rise. And demand for this precious metal could eventually surpass gold in 2016.

In the long term, the outlook for industrial use of silver is exciting. There are many new applications using metal that will drive demand. Many of these new applications use nanotechnology, which requires silver. Macquarie Research commodity analysts note in their recent forecast for 2016 that they see potential for “aggressive industrial demand growth,” especially in solar panel manufacturing, as the focus is now on developing renewable energy infrastructure around the world.

Along with the emergence of new industrial demand, the low availability of silver mines may also be an important factor for the market in 2016. Decrease in production of mines will be able to increase prices. About 40 percent of silver mining is a by-product of copper and zinc mines. However, mature zinc mines are now awaiting closure and copper producers are cutting production in response to low prices, which in turn will delay silver shipments in 2016.

However, while there is some positive industrial outlook on the use of silver, the outlook for the gray metal remains pessimistic in the first half of 2016, with analysts expecting silver to average around $ 15 an ounce.