According to the Silver Institute, last year’s increase in global demand for silver by 18% to 1.24 billion ounces led to a massive supply deficit. The amount of silver that was on the market in 2022 was 237.7 million ounces less.
Industrial Demand for Silver
As the globe moves away from fossil fuels, the demand for silver, which is utilized in various sectors like electronics and solar panels, is rising. The increase in silver is primarily the result of industrial demand, particularly from China. The industrial sector accounts for over 60% of silver consumption worldwide, with the remaining 40% going to investments.
Investment in Silver
- investments in physical silver: Investors can purchase silver bullion coins, particularly those made in Austria, Australia, Canada, Mexico, and the United States. Due to the near-99.5% purity of silver bullion, its value is always calculated based on purity. In 2021, silver consumption from the cutlery industry recovered by 32% from levels in 2020, much like the same happens with silver jewellery.
- Direct investment: purchasing derivatives (ETFs, futures). A few good reasons to invest in silver equities are to protect against inflationary risks, speculate on potential price increases for silver, and take advantage of market momentum in the TSX mining sector.
- Indirect investments, including buying stock in firms involved in the production, processing, or selling of silver. A silver mining firm, on the other hand, can generate many years of profits, earnings rise, balance sheet growth, cash flow, and possibly dividends for its stockholders.
Investors can select an investment item based on their preferred criteria. These investment choices offer easy solutions for investors to follow changes in the price of silver. According to an estimate, the average silver price will be $23.00 for the entire year, which would be a 6 percent increase.