Talking Point:
Silver Is Seen by Some as a Safe Haven Asset Much the Same as Gold, Both Can Hold Their Price over Time Making It Alluring to Investors Concerned over the Aftermath of the Coronavirus Pandemic.
Rising interest for silver from investors will balance sharp falls in utilization by jewelers and industries and will push the cost towards 19 USD an oz later in the year, an industry report said on Wednesday.
That would be a turnaround in value, which fell by lowest we seen in 10 years in March, and at 15 USD an oz is down about 20% so far year to date.
Silver Is Seen by Some as a Safe Haven Asset Much the Same as Gold, Both Can Hold Their Price over Time Making It Alluring to Investors Concerned over the Aftermath of the Coronavirus Pandemic.
However, because just over 50% of silver is used in products such as electronics and solar panels it is also very susceptible to loss in demand during global economic slowdowns.
Bar and coin financial investors will add 215.8 million oz to their portfolios this year — the most since 2015 — in the wake of amassing 186.1 million oz in 2019, as indicated by the Silver Institute’s World Silver Survey 2020.
Exchange-traded funds (ETFs) as used by bigger financial investors will add 120 million oz to their portfolios, up from 81.7 million oz a year ago, said the report, arranged by experts from Metals Focus.
The amassing of silver will slow down the fall in demand from industries to a 5 year low of 475.4 million oz from 510.9 million oz in 2019 and from jewelers to a 7 year low of 187.5 million oz from 201.3 million oz a year ago, it said.
The silver demand will decrease to 963.4 million oz, lows we’ve not seen since 2011 — from 991.8 million oz a year ago.
Be that as it may, the silver supply will also fall beneath 1 billion oz without precedent for years — to 978.1 million oz from 1,023.1 million oz in 2019 — as mining output decreases.
That will leave the market with its 5th consecutive yearly surplus in 2020, the report said.
The value will probably continue to fluctuate as the Coronavirus pandemic torment markets, said Philip Newman, a director at Metals Focus.
“There’s nothing straight line about it — it will be volatile,” he said.
However, he said a rising gold value as financial investors look for more secure assets would pull silvers value along with it.
Financial investors have already increased by over 70 million oz to ETFs this year, pushing their portfolios to record highs of around 800 million oz, as indicated by Metals Focus.
These investors are less likely to sell even when the value falls, Newman said.
