Silver Price Forecasts Cut Sharply on "Macro Outlook"
Monday, 6/24/2013 16:06
Silver price forecasts cut by two London bullion banks because macro economic picture changing...
The MACRO-economic outlook is now working against silver investment according to a leading analyst, who has cut her bank's price forecasts for the precious metal.
Dr.Edel Tully at Swiss investment and London bullion bank UBS now sees the silver price trading at $17.50 per ounce in one month's time, before rising to $20.50 three months from now.
That is a cut of one-third from UBS's previous silver price forecasts of $26 and $28 per ounce respectively.
"Silver offer investors exposure to the gold price and [is] effectively an insurance against...uncertainties, currency debasement and the implications of such on inflation," writes Tully.
But these aspects of the metal "will work to its detriment based on the current macro outlook," she says, pointing to the US Federal Reserve's plans to reduce its quantitative easing program, "and potentially even halt [it] next year."
Fellow London dealers Standard Bank note today that "Silver has a beta of 1.4 with gold," meaning that it tends to extend moves in the gold price by 40%, both up and down.
"[So] if gold moved lower," writes Standard Bank's research strategist Walter de Wet, "silver would struggle even more."
Silver price forecasts were also cut Monday by Credit Suisse. Analysts at the Swiss investment and London bullion bank now believe the silver price will fall to $18 per ounce over the next 3 months, and then down to $17 in a year's time.
Credit Suisse's previous silver price forecast for both Sept. 2013 and June 2014 was $20 per ounce.
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