Is the demand for silver growing?

Every key demand segment, except photography, is configured to record a new peak. Industrial demand is on track to grow to 539 million ounces (Moz). If macroeconomic conditions ease in the medium term and price support for these derivative metals decreases, the silver mining supply is also vulnerable. In fact, the year may also mean slower growth in industrial demand (with a forecast of 6 percent), jewelry (11 percent) and silverware (23 percent).

We continue to believe that silver is likely to benefit from supply restrictions in the face of growing demand. Without the subsidiary effect of rising by-product prices, the prospects for silver supply could be even weaker than expected. In addition, the growing range of applications is making silver in high demand in several end industries. Even so, the trend is likely to continue even when the market stabilizes, as the increase in demand for silver by the renewable energy industry reveals that silver is much more than a store of value asset.

Silver is a fundamental component of electric vehicles (EVs), which are experiencing strong growth in demand worldwide. Some notable trends may include the increase in the use of silver in the automotive industry, the increase in the consumption of silver nanoparticles, and the increase in silver consumption in the United States. Total combined demand for silver is expected to exceed 1 billion ounces this year, with approximately half of that amount coming from industrial demand for manufacturing technology with silver components. If costs are expected to rise and silver miners are not confident enough in rising silver prices, it's hard to imagine a scenario in which mining activity is likely to increase substantially.

In the photograph, which represents a small and decreasing part of the demand for silver, there was a small uptick after COVID due to the tendency to catch up with radiographs in healthcare after the decrease in lockdowns. Market participants interested in investing in silver would do well to consider these ideas when trying to determine where the spot price might move in the future. The physical demand for silver coins and ingots is the most volatile demand category (and it's difficult to get real-time data in the middle of the year). After all, silver is a safe asset that generally does well in times of crisis, and the past year was plagued by tense geopolitical events along with the current COVID-19 pandemic.

When Reddit traders flocked to silver last February in an effort to launch another campaign against hedge funds, the short-lived results revealed important differences between investing in stocks and investing in precious metals.