After Seeing ‘The Worst,’ Silver To Reach $18 In 2019 — ABN AMRO

(Kitco News) - Silver has been the weakest in the precious metals space this year and after seeing “the worst” trading action, the metal is finally due for a rally — first reaching $18 in 2019 and then hitting $20 in 2020, according to ABN AMRO.

“Silver prices have been beaten up more than we had foreseen,” said the Dutch bank’s senior precious metals and diamond analyst, Georgette Boele. “Year-to-date, silver prices have declined more than 14% and speculators hold extreme short positions.”

The metal has disappointed many traders this year due to its stubbornness and inability to rally during risk-off trading sessions.

Some of the major downward drivers have been a stronger U.S. dollar, higher U.S. Treasury yields, Federal Reserve’s monetary policy tightening, uncertainty surrounding the Chinese economy, and lower jewelry demand, Boele pointed out.

But, the good news is that silver has likely hit its bottom this year, with the price outlook for 2019 looking full of possibilities, ABN AMRO said.

“Silver is cheap and it is likely that prices will rally in our forecast horizon. So we are bullish on silver prices and our forecasts reflect that,” wrote Boele on Friday.

ABN AMRO sees silver prices reaching the $16-an-ounce level as soon as March, then rising to $18 an ounce in December of next year, followed by another rally in 2020 that will boost prices all the way up to $20 an ounce.

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