With the new year now in full swing, Silver is one of the top performing commodities in 2015. After falling over 71% from its high of $49.82 in April 2011, to a low of $14.16 in December 2014, silver is up 16.3% in 2015. Not only is silver up higher than gold in percentage terms, it’s nearly double gold’s performance of 9.3% in January.
Of course the commodity suffering the worst performance in 2015 is Brent Crude which is now down more than 15%. I explained why I believe the price of oil fell so much over the past half-year in my article RECORD GLOBAL OIL DEMAND: Even As The Price Of Oil Declined.
Furthermore, Brent crude is down further today due to the Biggest Weekly Inventory Build Since 2011:
The world is producing about 500,000+ barrels per day more than global demand. Thus, global inventories-stocks are increasing. According to the IEA – International Energy Agency December OMR Report, the world could bump up against global storage capacity limits in the first half of 2015 based on current supply-demand forecasts:
Based on current projections of still relatively weak demand growth and robust supply, global oil inventories would notionally build by close to 300 mb in 1H15 in the absence of disruption, shut-ins or cut in OPEC production. If half of this took place in the OECD, stocks there would approach 2 900 mb and possibly bump against storage capacity limits. The resulting downward price pressure would raise the risk of social instability or financial difficulties if producers found it difficult to pay back debt.
So, if the Middle East or other oil-producing countries don’t cut back on production, the world could run out of places to store oil. Furthermore, the IEA believes oil producers could come under increasing risk if the price of oil continues downward. 2015 may turn out to be the year that destroys the U.S. Shale Oil Miracle.
I compared some of the top commodities and indexes in the chart below. As I stated before, silver ranks on top at a gain of 16.3% in 2015, followed by gold at 9.3%, platinum at 5.3%, natural gas at 2.8% and the U.S. Dollar index at 2.2%. Even though the U.S. Dollar continues to strengthen against the other lousy fiat currencies, Gold & Silver outperformed the world’s reserve currency by a wide margin.
The precious metals also outperformed the two major stock indexes, the S&P 500 which declined 0.8% and the Dow Jones down -2.2%. Moreover, the king base metal copper is down a whopping 7.7% in 2015, while lumber fell 6.5% and wheat lower by 9%.
Although gold and silver ranked at the top compared to other leading commodities, many of the top producing precious metal stocks blew away the gains by the metals. The leading performing stock was Endeavour Silver which increased a staggering 40.7% in 2015.
It was followed by the three of the four largest gold producing companies in the world; GoldCorp at 34%, AngloGold at 30.8%, and Newmont at 30.1%. Barrick, the largest gold producer, ranked last at a gain of 22.3%.
Furthermore, the HUI index (mostly gold stocks) rising 25.3%, outperformed the SIL index (silver miners) at 17.3%. The other leading top silver producers were First Majestic at gain of 27% followed by Hecla and Pan American Silver at 25%.
Now with the ECB’s new QE program of 60 Billion Euros a month, events in the market will become even more crazy and volatile. At some point, investors will need to wake up to the fact that monetary printing and exponential debt increases are not long-term solutions for what ills the global economy.
In a blink of an eye, the world will change and investors who have purchased physical gold and silver will find themselves getting the better end of the deal.
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