The Latest Driver of Silver Prices, 'SIL'? Millennial Jewelry Buyers

While silver is facing the same downward forces currently pushing gold lower, there is a silver lining. Millennials have been strong buyers of silver jewelry, which should provide support for silver ETFs such as the the Global X Silver Miners ETF (SIL).

According to a recent Kitco News article, sales of silver jewelry rose for the 12th year in a row in 2020. When looking at the data closer, millennials were singled out as the primary buyers of silver products, based on a survey by the Silver Promotion Service (SPS).

Per the article, “around 42% of U.S. jewelry retailers that took part in the survey said they saw higher sales, with the majority highlighting double-digit growth of between 11% and 25%, the SPS said.”

“Silver jewelry continues to grow in importance for American jewelry retailers, maintaining double-digit sales increases and strong margins, despite the challenges related to the COVID-19 pandemic,” said SPS director Michael Barlerin.

SIL seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Silver Miners Total Return Index. Despite the recent weakness in silver thanks to a stronger dollar and a flight from safe haven assets like precious metals, SIL is still up 55% over the last 12 months.

SIL gives investors:

  • Targeted Exposure: SIL is a targeted play on silver mining.
  • ETF Efficiency: In a single trade, SIL delivers efficient access to a basket of companies involved in the mining of silver.

SIL Chart

Silver Still Shines Bright in 2021

Bullish analysts are making the case for silver through the rest of 2021. Phil Carr wrote in FX Empire that the precious metal is still the best trade this year.

“Silver is definetly the best trade in 2021. There is a lack of Silver around the world. There is not much Silver at any refineries and getting your hands on physical Silver is still difficult. In fact, Silver is now rarer than Gold, which means there is a risk of a real Silver squeeze this year,” wrote Carr.

“And let’s not forget the Green Energy Revolution,” Carr added. “Now the $1.9 trillion stimulus package has been passed, Democrats will turn their attention to President Biden’s ambitious goal of spending big on renewable energy infrastructure and solar power technology to combat climate change.”

A rise in renewable energy like solar power will certainly help silver’s case.

“Silver is a key component in renewable energy and solar power technology,” Carr said further. “Based on our proprietary research, photovoltaic demand for Silver could exceed 3000 tonnes in 2021 – and that’s just the beginning.”

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