Silver used to be only Golds little brother, but it has increasing industrial demand. Fundamentals about silver say two things: With increasing use for EV, electronics and solar panels silver is not only a monetary metal like gold, but also an industrial metal with increasing demand from these industries.
„Traditionally, silver prices have tracked gold prices fairly closely, which makes sense given that both function as monetary metals, and they often occur together in mineral deposits. The correlation between gold and silver since 1975 has been 0.8876. The 10-year correlation coefficient is 0.7511. However this year, the correlation has dropped significantly to 0.1959. The reason is the fact that both copper and silver are being increasingly demanded in green energy applications.“
(https://www.mining.com/web/silver-seen-tracking-copper-prices-higher/)
Other than Gold, Silver is increasingly used by industry:
https://www.free-bullion-investment-guide.com/images/fbig_2019-SilverDemandbyPercentage.jpg
Forecast for Silver consumption from Automotive Industry:
After a bearish trend silver seems to have found a bottom and technical indicators turn bullish.
Looking at the supply situation it must be noted that Silver is mined mostly as a byproduct from other mining operations, but Silver is limited.
With global reserves of about 530.000 MT and mine production of about 27.000 MT a year at the moment a limited resource is facing an increased demand from industrials and investors.
https://srsroccoreport.com/wp-content/uploads/2017/01/Years-Remaining-Of-Global-Metal-Reserves.png
A rising demand meets a limited supply.
Statistics:
https://www.statista.com/topics/1335/silver/#topicHeader__wrapper
The question remains, will this scenario result in rising silver prices or can the price remain where it is?
Commodities and miners are risky investments and especially Silver is very volatile, but prices are low and create an investment possibility as well as a diversification to tech stocks.
Submitted October 19, 2021 at 08:16AM by Whichwhenwhywhat https://ift.tt/3DZctLT
