The big silver news today (Friday, June 30) is how prices are on track for a 4% gain in the first half of the year despite falling for the second day in a row. We are still bullish on the metal’s price in 2017.
The price of silver is down 0.1% today and trading at $16.63 per ounce, marking the second straight session of losses after yesterday’s 0.8% decline to $16.65. If the metal closes at $16.63, it will post a flat performance for the week. However, silver prices would still cap off the first half of 2017 with a 4% gain.
Today’s silver price news came after the U.S. Federal Reserve reported that consumer spending growth slowed down last month. American consumer spending rose just 0.1% in May. That’s down from back-to-back gains of 0.4% in both April and March.
Consumer spending growth is one of the most important measures of inflation, and weak spending growth is a sign of lower-than-expected inflation.
Since inflation represents the general price increase of goods and services across the economy, low inflation typically means consumers will need to spend less money. Inflation fell to 1.9% in May from 2.2% in April, and the meager 0.1% consumer spending increase last month indicates inflation may be on track to keep falling in June.
The inflation rate and consumer spending growth are important for the price of silver, and slowing consumer spending growth is a bearish sign for silver prices.
But higher inflation can lead to higher silver prices. A high inflation rate leads observers to think the economy is weakening. After all, when prices on goods and services grow too high, people can’t afford to buy them, which reduces economic activity. This threat of instability usually urges investors to buy safe-haven assets like silver, which boosts silver prices.
Urgent: An incredibly rare gold anomaly is shaping up in the markets as we speak — one that has occurred ONLY twice in the past 20 years. And it’s about to happen again. Details here…
On the other hand, low inflation encourages consumer spending, since prices across the economy are lower. Over time, consumer spending can improve economic health by steadily raising prices, which ultimately leads back to high inflation.
Since a healthy economy usually means investors don’t need safe-haven hedges like silver to protect their portfolio, low inflation ultimately reduces demand for silver and thus lowers the price of silver. That’s why the weak consumer spending data from last month led to traders pushing down the price of silver.
But the lackluster consumer spending data is likely just short-term silver news that won’t have a lasting negative effect on prices.
According to Money Morning Resource Specialist Peter Krauth, the price of silver could rally as much as 32.3% from today’s $16.63 level to $22 per ounce by the end of the year. That means anyone who buys one ounce of the white metal today could be in for a 32.2% profit in just six months.
However, we have a way to make an even bigger return on silver. It’s a silver stock that analysts say could gain as much as 52.9% over the next 12 months, making it a great way to invest in silver this year.
Here’s our top silver stock to buy in 2017…
This Silver Stock Could Rise 52.9% Over the Next 12 Months
We recommend checking out Wheaton Precious Metals Corp. (NYSE: WPM). Formerly Silver Wheaton Corp., the Canada-based firm changed its name on May 10. Regardless, WPM is our pick for the best silver stock to buy in 2017.
Money Morning Chief Investment Strategist Keith Fitz-Gerald is keeping his eye on Wheaton stock. That’s because it’s the world’s biggest precious metals streaming company.
A silver streamer is a company that makes a deal with a silver mining company to buy its production at a fixed price. That kind of agreement can give streaming companies like Wheaton the upper hand because they can buy silver at a discount if the price of silver suddenly jumps before they receive the miner’s supply.
The WPM stock price is already up 2.3% to $19.76 this year, and we expect it to hand you more profits in 2017. Other analysts, including those from Thomson Reuters, give it a high one-year target of $30.21 per share. In other words, you could potentially reap a 52.9% return if you buy into Wheaton stock today. That makes it one of the best silver investments to have in 2017.
But that’s not the only investment Keith is looking at right now. Here are three others you should consider this year…
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.
Disclaimer: © 2017 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.
Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.