Silver is expected to shine in 2021 as demand rises to eight-year high

The Silver Institute, a global organization that draws its membership from across the silver industry, said it expects global demand for silver to rise to 1.025 billion ounces in 2021, its highest in eight years.

Increased purchases from investors and the industry as coronavirus pandemic prompted investors to stockpile silver, traditionally seen as a safe place to store money during crisis.

The metal’s price gained momentum which is expected to persist and continue to lift the price, as expectations that purchases of silver bars and coins would rise to a multi-year high of 257 million ounces this year.

Speculative buying, especially from retail traders and exchange traded funds, lifted metal’s price above $30 per ounce earlier this month, for the first time since 2013.

On the other side, the industries that use silver, such as electronics and solar panels, increase demand after the pandemic is brought under control and the global economic recovery starts to gain pace.
Industrial demand is expected to rise 9% from the previous year and reach 510 million ounces, the highest in four years.

The only sector which is expected to stay below levels seen before the pandemic is jewellery industry, which is expected to increase demand to 174 million ounces.

The silver market is expected to be slightly oversupplied, as the mine production is seen rising to 866 million ounces this year, the most in five years, while recycled supply is expected to increase for the fifth straight year, helped by fading pandemic-caused disruptions.

The outlook for the silver price in 2021 is very positive with expectations that the price would rise above $30 and that silver would outperform gold this year, due to smaller market and increased volatility.