The silver price forecast for the rest of 2015 is getting a big bullish sign right now...
Just look at what silver prices are doing today.
The white metal was up $0.12, or 0.72%, at $16.30 just before noon today.
One thing keeps pushing silver higher: Greece.
The broke country met with Eurozone officials Monday in attempts to finalize a debt-restructuring deal. In a proposal sent early on Monday, Greece moved to yield to lenders' demands for tax increases and pension reforms. Greece offered to raise the country's retirement age gradually to 67 and limit early retirements. It also offered to reform the value-added tax system to set the main rate at 23%.
But nothing has been resolved. Greek citizens are pulling money out of banks. They're afraid the government will impose capital controls that limit withdrawals.
Then there are concerns over the ripple effects that would felt across the Eurozone region.
The initial reaction in such a scenario would be in spike in silver prices.
With the situation in the region grave last week, silver prices rallied. The silver price climbed 1.3% Thursday to a two-week high of $16.153 an ounce. The white metal held onto gains Friday, with the silver price up $0.013 at $16.14 an ounce in early trading.
Also stoking silver last week were dovish comments from the U.S. Federal Reserve. The central bank said that while it remains on track to implement its first interest rate increase since June 2006 sometime this year, hikes will proceed at a slower pace than previously expected. Silver prices have been pressured this year from expectations of interest rates boosts.
So what's the longer-term silver price forecast?
Here's a look at a couple factors that will affect the silver price for the remainder of 2015.
2015 Silver Price Forecast
Demand for silver is a key driver of the white metal's price.
Silver demand can be broken down into two groups: industrial and investment.
Bullish Silver Price Forecast Factor No. 1, Industrial Demand: Fabrication demand covers silver's use in industry (65% of fabrication demand), jewelry manufacturing (23%), photography (6%), and silverware (6%).
Global silver demand rose last year, with silver jewelry demand setting a new record, according to data from the World Silver Survey 2015. Solid growth was also logged in many silver industrial-use categories, including solar panels.
As one of the best electrical and thermal conductors, silver is ideal for a variety of electrical uses, including switches, multi-layer ceramic capacitors, conductive adhesives, contacts, and in silvered film in electrically heated automobile windshields.
Further, new uses for silver continues to emerge where incorporating silver makes the difference between an ordinary product and a unique one. Many of these fresh uses rely on silver's antibacterial qualities and range from food packaging to radiofrequency identification (RFID) tags to autocatalysts.
Emerging uses that benefit from silver's antibacterial properties, or incorporate silver's electrical and thermal conductivity, are expected to boost silver consumption in 2015, according to GFMS.
Bullish Silver Price Forecast Factor No. 2, Investment Demand: Investor sentiment has always been a cushion for silver. And, sentiment remains optimistic.
Silver investors tend to buy the dips. They also tend to buy and hold. The white metal has long been a fan favorite among small retail investors and speculators who aim to gain exposure to gold at a fraction of the price.
Money Morning Resource Specialist Peter Krauth notes that while gold exchange-traded funds (ETFs) have had sizable outflows this year, their silver counterparts have experienced slight positive growth.
"As for sentiment, silver appears to be benefitting from a more positive perception than gold," Krauth wrote last week. "And that is despite (or thanks to?) having experienced much more downside volatility than gold in the last four years. Gold is about 37% off its 2011 peak, while silver is down about 67%. As well, the gold/silver ratio is currently at an historic high of 74, which bodes well for silver prices going forward."
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Krauth thinks "silver has a strong chance of challenging its early 2015 peak near $18.50 and ending the year above that level."
That would mean a better than 15% gain from present silver price levels.
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- Bloomberg: Gold, Silver, Industrial Metals