Silver mining costs range from $ 9-15. The amount of the costs depends on the availability and difficulty of the mining. Silver is mainly used for its excellent chemical and physical properties. Most mining companies are not primarily focused on silver, but they also work with other commodities.
The current price (this month) is currently in the range 14-14.8 USD / ounce. The fall in silver prices has caused a fall in demand for this commodity and a rise in fed interest rates, which has boosted the US dollar. A similar trend is also estimated for the future. Steps to the future are known, respectively. the trend of raising rates should continue, which will strengthen the dollar and so weaken the commodities. Silver is a safe harbor when the economy is overheating and the world’s biggest economy is behind. That’s where we are right now.
Signs of economic slowdown are expected (and this phenomenon has already occurred) in Germany, Turkey, but also in the USA. Dear metal, it is almost always in times of recession or in times of crisis, when investors and traders move their capital from stock markets to “safe” commodity ports. In terms of the economy is on the market a lot of negative fundamentals (in the Eurozone – PIIGS, QE, the minimum rate, but also in other world economies such as the US – trade war, debt, protectionism, B- Brexel, China – high debt to GDP, business war, devaluation of the Chinese currency etc.).
Yes, it is true that silver is many times traded below their production costs and average costs, but if we add to this sentiment in terms of decreasing inventories and potentially higher demand in the industrial sector in future and current economic conditions, there is pretty decent likelihood increase prices in the coming months and years.
Silver production is the smallest since 2012, when silver was traded at USD 27-35 per ounce. By 2014, this production has grown (in this sector), but we can see from the statistics, on the contrary, respectively. negative trend. If the decline in silver production continues, it may mean an increase in the silver price in the future. Below we explain why this may be based on statistical data. Silver stocks are down with the 2016-2017 comparison, with continued decline in inventories expected in 2018. This is a major problem for the future. It is true that total demand is declining, and that is also the price in the markets, but if the demand remains the same, respectively. its decline will be less than the fall in inventory in the future, it could cause the growth of this commodity.
The biggest demand for silver was recorded in 2015 (as a comparison, not historically), but we can note that even though it leaves a trace on its price, it does not reflect its true value. Therefore, we can not only focus on this indicator. Production, stock and economic situation must also be taken into account. But we can see that overall demand has fallen in recent years, but there is a difference in terms of sectors. In spite of the overall decline, demand is growing especially from the industry (high silver use) and jewelery (India – culture). The value of cheap silver in 2015 was mainly used by retail (jewelry, etc.) and institutions (silver reserves).