After silver’s climb earlier this year to the highest prices since 2013, the metal has significantly underperformed sister metal gold. With silver’s value dropping to its lowest in 14 months, some investors may see an opening to buy.
“Silver presents a better opportunity than gold at the present time,” says Jeff Wright, chief investment officer at Wolfpack Capital. However, he warns investors not to rush into the market just yet, especially as a rise in 10-year Treasury yields has fueled a retreat for precious metals that could see prices for both silver and gold move even lower.
“While silver typically finds over half its end-demand from tech and industrial uses, investment flows are what drive prices higher or lower,” says Adrian Ash, director of research at BullionVault. That means silver is facing a “stiff headwind from the global shift toward tighter central-bank policy,” just like gold.
He pointed to a January Silver Institute report, produced by Metals Focus, that said silver automotive demand is forecast to climb to an estimated 88 million ounces by the end of 2025, from 51 million ounces in 2020. “Investors should put silver in their watch list,” says De Casa. “Silver is getting close to being a bargain.”
Total global silver demand is forecast to climb by 15% this year to 1.03 billion ounces, according to the Silver Institute.
Silver is “currently lacking a strong and popular narrative to attract dollars from generalist investors new to the market,” says BullionVault’s Ash. “But silver’s got plenty of great stories to tell, just like the idea of China’s massive solar-panel installation project a decade ago” spurred record-high silver prices at nearly $50 an ounce, he says.
Wolfpack Capital’s Wright believes there is a “building scarcity” for silver and a potential “opportunity for folks interested in metals over the long term.”
Silver Long (Buy)
Enter at: 24.555