Silver's resurgence in demand is forecasted.
Hey there! Let's chat about the shimmering silver prices and why they're expected to pick up steam in the near future. By Emmeran Eder
Silver prices have taken a beating this year, plummeting around 25% in USD since April. Factors like a robust US dollar and impending recession have played a significant role in this decline. Yet, it's essential to remember that more than half of the metal's annual production goes straight into the hands of industries, particularly those in the medical tech, semiconductor manufacturing, and now solar energy sectors.
The Fraunhofer Institute even reports that around 15% of global annual silver production is solely dedicated to the solar industry. This number is on the rise! China, another critical player, has seen an uptick in PV module installations in 2022, despite a lackluster economy.
Industry experts predict a slight silver supply deficit in 2022, a situation that could worsen in 2023 as the drive towards decarbonization strengthens, thanks to trends like electrifying vehicles and the expansion of renewable energy generation. Commerzbank's commodity experts see a lot of potential for silver to make a comeback in 2023.
Silver - Marriage Madness
In the short term, it seems silver prices are on the rise, thanks to the upcoming wedding season in India. Traditionally, gold is the gift of choice during this time, but with gold prices near record highs in Indian Rupees, many are gravitating towards the less expensive silver alternative. Adding fuel to the fire, the government has ramped up import duties on gold while keeping the Silver imports' duties unchanged. Demand is so intense that importers are prepared to pay exorbitant shipping costs to air-freight their silver supplies direct to India.
Marcus Landau, a derivatives expert at DZ Bank, believes the silver's technical chart pattern has started to show signs of improvement, pointing to a potential bottom at 18 USD per troy ounce. Interested investors can mobilize their silver investments using the non-currency-hedged silver ETC (WKN: A0N 62F) from WisdomTree, complete with an annual fee of 0.49%.
(Note: While specific 2023 momentum factors aren't explicitly mentioned, broader trends across key sectors—solar energy, automotive electrification, and cultural demand—suggest a promising future for silver prices.)
- The demand for silver is expected to increase in 2023, particularly due to the growth in the solar energy sector and the drive towards decarbonization.
- Commerzbank's commodity experts have indicated a significant potential for silver to recover in 2023.
- During the upcoming wedding season in India, there is a surge in demand for silver due to high gold prices, prompting some investors to switch to silver as a less expensive alternative.
- Interested investors can invest in silver using non-currency-hedged silver ETC (WKN: A0N 62F) from WisdomTree, which comes with an annual fee of 0.49%.
