Silver has gone up against other assets. Two clear things became clear about silver. Silver is outdoing the equity markets. The second one is that as governments continue to debase their currencies through printing more money they are pushing investors to put their money in wealth protected like gold and silver.

• Silver vs Money Supply

As central banks continue to focus on economic recovery, any excess consumer inflation can be looked up as transitory because of the post-pandemic recovery plan. The Federal Reserve has stated that real-interest rates are increasingly getting negative. The Fed adopted inflation targeting, meaning that since inflation has been running below the Fed’s target for a lot of years, the bank will let run above the target for some time. This will have the effect of pushing real interest rates down. Historically, the silver price has been negatively correlated against real-interest rates, which mean when interest rates are pushed further down when the price of gold or silver rise.

Central governments have no choice but to continue funding governments and their social support programs. This means government borrowing isn’t going to stop anytime soon. During this time currencies will have to fight an uphill battle against being debased. This is why this could be the perfect time to buy silver.

• Increasing industrial demand

With the economy opening up, the demand for silver will go up especially in the renewable energy sector as it is the main material for solar panels and the automotive industry. According to a recent World Bank report, the industrial consumption of silver is expected to go up by 50% by 2050. The biggest industry that will drive the demand for silver is solar power industry. Many small and big solar panel companies will buy silver now more than ever as more people adopt the principles of sustainable energy consumption and the reduction of the use of fossil fuel to create energy.

• Increasing demand in Jewelry and Silverware manufacturing

The demand for jewellery and silverware has gone up and will keep going up especially with online markets going up in the last years. This will boost the demand for silver for jewellery and household products.

• Increasing use for medical purposes

Research on the effectiveness of silver for medical purposes has increased. Silver has been used in dressing up wounds because of its anti-bacterial property. It has been known to be toxic to bacteria and viruses. It is the best alternative to alcohol-based sanitizers which stops quickly because it evaporates as soon as it is exposed to air.  

The silver nanowire market has grown considerably over many years.  This is also because of the anti-microbial properties of silver but also its properties as a strong conductivity.

• The reduction in silver mine production

The global mine supply of silver declined by 6.3% between 2019 and 2020. This is mainly because of the effect lockdown rules had on the silver mining industry. The pandemic continued to limit the mine supply this year. This is likely to continue a couple more years into the future.

Silver has also gained some buzz on social media with a lot of people learning of its uses as well as its investment value. Whether it is headlines about GameStop short sell squeeze that sent the price of silver soaring earlier this year. This shifted the attention towards silver and many people got to learn about the true potential of silver.

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