At $25/Ounce, Silver Prices Are Too Low to Ignore
You don’t hear much about silver these days because the information is deemed boring. Silver has acted nothing like the stock market or cryptocurrencies, so not much attention is being paid to it.
Silver trades just slightly below $25.00 per ounce at the moment. That’s too low for investors to ignore. Silver prices could go much higher in the coming months and quarters. For patient investors, the gains could be immense.
Why remain so bullish on silver?
The supply-and-demand situation in the silver market is distorted. A lot of silver could be needed in the coming years. Meanwhile, the supply side continues to struggle a bit. If silver prices remain low, the supply side will struggle further.
This is basic economics: whenever demand increases and supply suffers, prices skyrocket.
Look at the Industrial Demand for Silver
Too often, people forget that silver is an industrial metal. It has many industrial uses, and in the coming years, silver’s usage could increase.
The global economy is in the midst of electrifying everything, and this is only expected to increase in the years ahead. Guess what? Silver is a key component in going electric.
Here’s some perspective.
The solar photovoltaic (solar panel) industry consumes 10% of the global silver supply. According to a report by Precious Metals Commodity Management LLC for the Silver Institute, the solar photovoltaic market will consume 15% of the total silver supply by 2025 and 19% of the total silver supply by 2030. (Source: “Market Trend Report: Silver in Printed & Flexible Electronics,” Silver Institute, last accessed August 4, 2021.)
In simple words, one in five ounces of silver taken out of the ground by 2030 will be used in the solar power industry.
But that’s just one sector. The printed and flexible electronics industry is expected to consume 48 million ounces of silver in 2021. By 2030, this figure is expected to be around 74 million ounces. That represents an increase of more than 54% in less than 10 years.
Moreover, a lot of silver is used in the consumer electronics industry. In 2020, 33.9% of the global silver supply was used by the consumer electronics sector; that’s 327 million ounces in total.
Case for Owning Silver Keeps Getting Stronger
Dear reader, I could go on and list all the industries that use silver and how the demand for the metal is increasing, but what I’ve said so far should give you a good idea of what’s happening in the silver market.
If you look at the supply side, the silver market has been having a hard time. Silver producers have suffered for years due to low silver prices. They’re trying to get their act together now, but it will be some time before silver producers are in good shape and able to fulfill the demand.
I believe the case for owning silver continues to get stronger.
This is what you have to know about commodities: once the investors/speculators get a whiff of problems, they react very quickly. All the stars are lining up perfectly for higher silver prices. It’s just a matter of time until investors panic-buy silver.
It’s a good idea to pay attention to silver producer stocks. There are very few primary silver producers out there. When silver prices soar, these producers could become cash cows and profit-generating machines. That could mean robust returns and dividend payments from silver producer stocks.