Silver Demand Set to Meet Second-Highest Level on Record

When it comes to being a store of value, gold has always been ahead of silver. However, silver’s duality of an industrial metal along with being a precious metal could allow it to see record highs this year, according to the Silver Institute.

“Stronger industrial offtake is a principal catalyst for the rising global demand for the white metal, and the sector should hit a new annual high this year,” the Institute said, noting its dual use as an industrial metal used in manufacturing automobiles, solar panels, jewelry, and electronics.

Amplified global demand will also be a catalyst for higher silver prices. The Silver Institute is forecasting silver to reach as high as $30 per ounce, constituting a record high, according to data provider LSEG.

“We think silver will have a terrific year, especially in terms of demand,” said Michael DiRienzo, executive director of the Silver Institute.

2 Silver Options to Ponder

Investors looking to have the ease of investing in silver prices via a fund and retain the option to convert shares into actual silver bars should consider the Sprott Physical Silver Trust (PSLV). The fund provides exposure to the precious metal without the additional hassle of storing it. The fund invests in unencumbered and fully allocated London Good Delivery (LGD) silver bars. As mentioned, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions).

For silver to advance, gold historically has had to make a move first. While the Federal Reserve is standing pat on interest rates in the current economic environment, eventual rate cuts could pave the way for a weaker dollar and thus gold, followed by silver, could benefit.

“Here’s what usually happens with silver: it does move with gold, but it moves later,” said Randy Smallwood, CEO of Wheaton Precious Metals.

Rather than try to time the market and wait for gold to make a move, and then subsequently silver, investors can reap the benefits of both moves. That is available with the Sprott Physical Gold and Silver Trust (CEF). This is a closed-end trust that invests in unencumbered and fully allocated physical gold and silver bullion in LGD bar form. CEF’s overall goal is to provide a secure, convenient, and exchange traded investment alternative for investors who want to hold physical gold and silver without the inconvenience typical of a direct investment in physical bullion.

For more news, information, and strategy, visit the Gold & Silver Investing Channel.