Metals Focus: 'Silver is now more interesting than gold'

The price of gold has risen considerably in recent months, but silver is perhaps even more interesting at the moment. This is what research agency Metals Focus writes this week in a New update. The precious metal has lagged behind gold, while it can take full advantage of an increase in both investment demand and industrial demand. Many commodities have already risen significantly in price due to a combination of economic recovery and increased speculation. Silver can also benefit from this, because this precious metal has many industrial applications.

Metals Focus expects silver to provide a higher return than gold this year. Not only because of extra industrial demand, but also because of increased interest in investment silver. In the first quarter of this year, global demand for Silver Coins and Silver bars 43% higher than a year earlier, which is partly related to the Silver Squeeze from the beginning of February. In addition, ETFs' silver stocks are already up 6% this year, putting them near record highs.

'Silver is outperforming gold this year'

The U.S. has traditionally been the largest market for investment silver, but India is well on its way to taking over that role. In 2010, that country accounted for less than 12% of the global silver market, but in 2019 its market share had already risen to 21%. In doing so, the country overtook the US as the largest market for physical silver. Last year, however, the roles were reversed due to the corona crisis. In the US, demand for investment silver increased, while demand in India more than halved. If the Indian silver market continues to recover from the coronavirus pandemic this year, it could give a strong boost to the Silver Price.

Metals Focus expects silver demand to remain strong in the coming months. Despite concerns about the coronavirus, continued monetary and fiscal stimulus will further support economic growth. This will also have a positive effect on the prices of industrial metals. It can also further fuel inflation, which is positive for precious metals such as gold and silver if interest rates remain low. Due to the many industrial applications of silver, such as solar panels, the research agency expects silver to outperform gold this year.

In 2019, India was the largest market for silver in the world (Source: Metals Focus)

This contribution was made from Geotrendlines