Even if safe-haven demand for hard assets abates, silver exchange traded funds could continue to find support out of the industrial sector as the precious metal is a major component in many manufactured products.
For instance, silver used in the photovoltaic panel industry is growing and could reach record levels in 2018, Maxwell Gold, Director of Investment Strategy for ETF Securities, said in a note.
“Silver’s unique reflective and conductive properties make it a key component in capturing and generating electricity through sunlight,” Gold said. “The fastest growing industrial segment for silver has been its use in photovoltaic (PV) panels for solar energy. This has resulting in demand for solar PV usage becoming a key component for the silver market.”
As the solar panel industry expands, silver will also enjoy greater industrial demand. Global solar photovoltaic annual installed capacity is expected to hit 112 gigawatts by 2021, with cumulative increase in solar electricity capacity of 506 gigawatts over the next five years, according to GTM Research.
“This should boost silver demand which uses about 2/3 ounce of metal per PV panel,” Gold said.