Rising inflation and the silver deficit were not enough to push the silver price up in 2021.
According to the U.S. Mint, demand for silver fell 6% in 2021. It sold just over 28.2 million ounces of silver, down from more than 30 million ounces in 2020, while gold demand rose to its highest level in more than a decade. After a good start, silver demand has steadily declined.
The silver price, on the other hand, raises some questions. One of the most important is probably why the silver price has not been able to respond to the silver deficit in the market. The Silver Institute reported a deficit of about 7 million ounces, the first deficit in 7 years. The answer to this probably lies in the way the silver price works, mainly through paper silver. It is well known that banks and hedge funds call the shots here.
YTD silver prices have now already gained 6.27% also thanks to the price jump yesterday (January 19). At the moment, silver is still trading at $24.24 per ounce. Interesting, however, when looking over a longer period. Over a year, the price of silver has fallen by 7% and since then has remained stable above the $20 mark. This could be an opportunity for investors since silver has recently received little attention.
However, the signs are very good for silver. The monetary factors with negative real interest rates, rising currency inflation, and historically low demand in recent times are all bullish factors for silver. In addition, there are factors such as increasing industrial demand in the coming years, as “green” technologies urgently need silver. Experts estimate that demand will exceed supply in the next few years.
And ultimately, the price of gold also plays a role. Past silver bull markets have usually followed a rising gold price and gold demand as described above is at its highest level in a decade.
An opportunity to participate in the silver market are shares of silver producers. Some of these have seen real sell-offs in the last year. But exactly this could be the chance for investors to get into the market early and get companies cheap. YTD, most have already gained, but over a year, most are still in the red.
|Company||Ticker||Price||YTD %||1 Year %|
|Pan American Silver||PAAS||$ 24.90||-0.28%||-15.68%|
|Hecla Mining||HL||$ 5.78||10.73%||7.43%|
|First Majestic Silver||AG||$ 11.88||6.93%||-6.09%|
|MAG Silver||MAG||$ 16.64||6.19%||-8.22%|
|Coeur Mining||CDE||$ 5.44||7.94%||-35.39%|
|SilverCrest Metals||SILV||$ 8.65||9.36%||-5.98%|
|Fortuna Silver Mines||FSM||$ 4.00||2.56%||-46.16%|
|Endeavour Silver||EXK||$ 4.67||10.66%||9.37%|
|Silvercorp Metals||SVM||$ 3.83||1.86%||-34.19%|
|Great Panther Mining||GPL||$ 0.24||7.73%||-70.00%|
|Aya Gold & Silver||MYAGF||$ 7.35||-1.34%||133.33%|
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