Silver-related exchange traded funds are shining as the outlook for silver demand looks promising.
Among the best-performing non-leveraged ETFs of Friday, the ETFMG Junior Silver Miners ETF (NYSEArca: SILJ) advanced 5.5%, and the Global X Silvers Miners ETF (NYSEArca: SIL) rose 4.6%.
Meanwhile, the Aberdeen Standard Physical Silver Shares ETF (SIVR) advanced 1.3%, and the iShares Silver Trust (SLV) was up 1.8%. Comex silver futures were hovering around $23.5 per ounce.
According to the Silver Institute, the outlook for silver demand in 2022 is “exceptionally promising,” with global demand projected to climb 8% to a record of 1.11 billion ounces, MiningWeekly reports.
Unlike gold, the heightened demand for silver will be supported by record industrial fabrication, which could improve by 5%, as the metal is utilized in both traditional and critical green technologies. For example, the institute estimated that record photovoltaic solar panel installations will bolster silver demand in this segment to an all-time high this year.
Furthermore, demand is also expected to remain robust in the automotive and 5G-related industries, despite a prolonged global semiconductor shortage.
Physical silver investment demand for silver bars and bullion coins could surge 13% in 2022, potentially hitting a seven-year high. Additionally, jewelry and silverware demand in 2022 could rise by 11% and 21%, respectively.
Meanwhile, on the supply side, total global silver supply is expected to increase by 7% to 1.092 billion ounces in 2022, with silver mine production forecasted to expand 7% to a six-year high this year. Silver recycling should be more modest in 2022, with volumes likely to rise by 3%, due to higher industrial recycling.
“Early 2022 has seen gross domestic product growth downgraded for several major economies, along with rising financial market volatility. This points to an increasing risk that the speed of the US interest rate hiking cycle could turn out to be slower than current market expectations have allowed. As a result, silver prices should initially benefit from fresh investor interest in precious metals. Silver’s high beta should also see it outperform gold, with the gold:silver ratio projected to retreat below 70 by year’s end,” according to the Silver Institute.
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