Industrial and investor demand for silver shows no signs of waning
A report from the nonprofit Silver Institute forecasts that silver demand for printed and flexible electronics will increase by five percent over the next 10 years. It estimates that the demand for the precious metal will increase from a predicted 48 million ounces (oz) this year to 74 million oz in 2030.
Silver is used in a wide range of everyday products, from electronics to jewelry and coins. Its high electrical conductivity and durability gives it numerous industrial and technological applications, with almost every mobile phone, computer, automobile and appliance containing silver.
The report, which was authored by the consultancy company Precious Metals Commodity Management, shows that silver will continue to play an essential role in these applications. In total, it forecasts that the printed and flexible electronics industry will consume 615 million oz of silver this entire decade.
Investor demand for silver will also stay high, due in part to inflation concerns. Precious metals such as gold are seen as hedges against rising prices of consumer goods and a decrease in the value of the dollar. And while silver is not as stable an inflation hedge as gold, the metal tends to track with the latter over time.
"If gold rallies then silver tends to rally, but even stronger," Ole Hanson, head of commodity strategy at Denmark's Saxo Bank, told CNBC. "So most silver investors are probably keeping a close eye on gold prices, the level of the dollar and the level of interest rates."
Silver also stands to benefit from the reopening of the global economy, according to Max Layton, managing director of commodities research at Citi Global Markets. This is due to an increase in industrial production and maintained investment demand, he said.
"The pandemic resulted in a major decrease in U.S. real interest rates, and a shift in allocations out of wealth and household savings into gold and silver. This more than offset the weakness in industrial consumption, and continues to do so," he said. Follow MarketCrash.news for the latest on silver investment. Sources include:
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