by SignalFactory · December 21, 2020 | 11:46:14 UTC
Silver continues to prove its use beyond just a currency or a haven investment, with new applications expected to see a tripling of demand in the next decade. It is also starting to beat gold at its own game.
The precious metal is slowly becoming better known for its antiviral properties and its usefulness in monitoring a person’s vital signs, as well as its importance in solar panels due to it having the highest electrical and thermal conductivity of all metals.
But predictions for silver’s rise in value also lies in the increasing demand in the next generation 5G technology.
According to the Washington-headquartered non-profit industry body The Silver Institute, the electronic components that enable 5G technology will rely strongly on the silver to make the global 5G platform perform seamlessly.
Right now, 5G-related silver demand only amounts to about 7.5 million oz given the industry is in its infancy.
But the Silver Institute estimates that with the ramp-up in the rollout of 5G in the coming years, the amount of silver required will climb to around 16 million oz by 2025 and 23 million oz by 2030. That is more than 3x the current demand.
As a comparison, silver’s use in the once emerging photovoltaic industry stood at about 40 million oz in 2010, and by 2018 it had reached 80.5 million oz.
And market watchers are extremely bullish on the outlook for silver.
In its September Global Commodities Quarterly, Citi said it could see $US40 ($52.77) an oz within six to 12 months with upside cases of US$50/oz and even US$100/oz based on technical analysis.
Now, silver is trading at about $US25/oz — more than double its lowest point in 2020 of just under $US12/oz in March.
Silver is also starting to outperform gold. Last Tuesday the silver price climbed 2 percent to $US24.55, while gold only advanced 1.18 percent to $US1853.80.
This is a key trend that emerged during the only two times in history that silver has run hard – both following recessions.
The first time the price went from sub-$US5 an ounce during the 1970s recession to almost $US50 an ounce in the early 80s. The second time, following the GFC, silver again ran hard, from below $US10 an ounce to over $US45 an ounce in 2011.
These short-term percentage gains at the time far exceeded gold’s gains during the same timeframes.
Add to that the fact the gold-silver ratio continues to narrow and all signs point to a silver bull run.
The gold-silver ratio is the number of ounces of silver it takes to buy one ounce of gold.
Any widening in the ratio above the long-term average of 63 is generally taken as a cue to buy silver as it begins to look cheap in relative terms against gold. In March this year, the ratio hit a fresh peak of over 120 before beginning a swift descent. It is currently sitting at around 73, not too far off its five-year low of 65.
Increasing demand and a rising silver price are beneficial for the ASX-listed stocks getting close to production or with advanced projects.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.
