Some good news for
these investors comes from Colin Hamilton, head of commodities research at BMO
Capital Markets, who sees a new role for silver in the decade to come, which
will shake-up demand.
“While gold
naturally gets most of the attention in a macro environment of aggressive
monetary support, we feel there is an opportunity emerging in silver. As
governments seek to further bolster economic recovery, we anticipate
silver-intensive areas such as 5G and solar technology could well benefit from
any fiscal impulse, making silver increasingly the ‘infrastructure’ precious
metal,” Hamilton wrote in a report on Tuesday.
Silver has always
been thought of as having a substantial industrial component to it, which has
lately been dragging the prices down. But, the new infrastructure role could
significantly change the supply-demand dynamics.
“Silver’s
physical demand outlook [will] witness a shake-up as new technologies come to
the fore,” Hamilton said. “Traditionally considered an industrial
precious metal with applications as a conductive and soldering element within
electronics but also as a brazing alloy, we believe silver’s use in 5G and
photovoltaic (PV)-related technology will increasingly position it as an
infrastructure commodity.”
More demand is in the
cards for silver, noted Hamilton, citing additional stimulus measures.
“Globally,
fiscal stimulus measures are set to bring forward shifting demand-side gains.
This new and growing source of demand growth for silver is likely to emerge
earlier than expected in the current environment, as the economic fallout from
coronavirus (COVID-19 virus) across major emerging and industrialized markets
prompts governments to implement unprecedented fiscal stimulus measures to
revive activity,” he said.
China will play a key
role in increased demand, especially when it comes to 5G and other
infrastructure advances.
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