In late January, a Reddit WallStreetBets subpost triggered a call to action to buy silver.
Although this has been a massive buying wave, silver demand actually first jumped back in March 2020 as the initial COVID-19 shocks caused much of the world’s economy to shut down.
Silver gained an impressive 47% in 2020, and has been trending sideways for the past 9 months.
Based on sustained robust buying over the past year, it’s not surprising the Institute expects physical demand will reach a six-year high of 257M ozs.
As we can see from the following table, net physical investment was up 16% last year, after already gaining 12% in 2019.
A recent analyst report from Heraeus Precious Metals said they foresee silver prices outperforming gold again this year, spurred on by rising inflation and burgeoning industrial demand as the economy recovers from the COVID-19 pandemic.
According to S&P Global Platts Analytics, global installations of solar panels are forecast to grow 7% or roughly 8 GW/year into 2025, citing supportive government policy developments globally.
With demand at 50M silver ounces in 2020, it’s expected to jump 80% to almost 90M ounces by 2025.
There is currently a shortage of semi-conductors, exacerbated by the pandemic as demand has shifted towards TVs, home computers and game consoles.
And given the outsized gains silver produced last year, doubling gold’s return, we could well be on our way towards that outcome.
And Goldman Sachs recently repeated its bullish view on silver, saying it projects the metal’s price to reach $33 per ounce, spurred by President Biden’s drive towards increasing renewable energy.