Silver Following Gold’s Lead to Record Highs
Gold’s recent breakout to record highs has investors optimistic about silver as well. Often referred to as gold’s “little brother,” silver has been hovering above $28 an ounce, up roughly 23% over the past two months, compared to a 19% rise for gold during the same period.
According to Sprott Asset Management CEO John Ciampaglia, silver tends to follow gold’s lead. Gold typically breaks out first, and then within a few months, silver takes charge and surges ahead. This pattern seems to be playing out once again.
Aside from price trends, investors are also turning to silver due to its increasing industrial use in the green energy transition. Not only is there strong buying coming from India, but the demand for silver is steady due to the construction of solar panels on a massive scale around the world.
Silver’s Industrial Applications Drive Demand
Recent data released by the Silver Institute shows that the use of silver in industrial applications hit a new high in 2023 for the third consecutive year. This trend is largely driven by the expanding green economy and the growing adoption of solar panels. Higher-than-expected capacity and adoption rates for solar panels are contributing to the surge in demand for silver.
Silver’s Supply and Future Demand Outlook
The Silver Institute anticipates a 1% decrease in silver supply this year, leading to the second-largest market deficit in over 20 years. Furthermore, the industry group foresees an expansion of demand beyond the energy transition in the years to come.
According to the report, silver will become essential in various industries as artificial intelligence (AI) technology advances. End uses expected to incorporate silver in AI include transportation, nanotechnology, biotechnology, healthcare, consumer wearables, computing, and energy in data centers.
Silver previously reached a record high just above $48 per ounce in April 2011.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
