Record Demand, Industrial Usage Supports Case for Silver ETFs

Silver prices have been benefiting alongside gold, rising amid high inflation and a weakening dollar. Record demand combined with its industrial usage should support the case for higher prices moving forward — which will be good news for silver ETFs.

The industrial use component gives the metal tangible benefits compared to gold, which functions more as a store of value. Given silver’s usage in a variety of applications, it can also benefit in an economic downturn. That’s imperative, given that the likelihood of recession continues to amplify.

“Silver has a myriad of industrial uses, including solder and brazing alloys, batteries, dentistry, glass coatings, LED chips, medicine, nuclear reactors, photography, photovoltaic (or solar) panels, RFID chips that track packages and worldwide shipments, semiconductors, touch screens, water purification, and many others,” a Barcharts article explained.

Even during inflation-ridden 2022, silver was able to see record demand.

Read more: With Banking Sector On Shaky Ground, Get Silver Exposure

“In a recent press release, the Silver Institute reported that all leading silver demand categories rose to record highs in 2022, with total demand at 1.242 billion ounces, up 5% from the previous year,” the article added.

That demand may not be waning if forecasts are correct. Some market experts foresee record prices ahead in the next few years.

“We expect to see record prices on an average annual basis at some point in 2024-2026,” said Jeff Christian, the managing partner of commodities consulting company CPM Group in a recent video. “We’ve been saying that for some time.”

Get Redeemable Silver Exposure

For investors looking for silver exposure, ETFs are a handy tool. What’s more, trusts can offer investors exposure to the benefits of silver ownership without the logistics of storing it.

The Sprott Physical Silver Trust (PSLV).is a closed-end trust that holds unencumbered, fully-allocated London Good Delivery bars of silver bullion. These bars are stored in the custody of the Royal Canadian Mint.

As such, shareholders also have the ability to redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions). Such redemptions do not dilute the trust’s exposure for remaining shareholders.

PSLV carries with a management expense ratio of 0.58%.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.