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.
SILVER LONG (Buy)
ENTER AT: 16.182