2020 changed the entire course of trading and investments. While bringing a standstill in the trading of certain commodities, the pandemic elevated investments in certain others. Silver certainly proved to be a resilient metal, as reported by various investment websites, including Indigo Precious Metals. In 2020, silver climbed the impressive stride of 137 per cent compared to gold, which increased merely by 38 per cent.
The white metal displayed its best performance of the last decade with an impressive comeback of outperforming gold. Looking at the remarkable performance, experts predicted in 2020 that the precious metal should witness a price gain in the following year while continuing to outperform gold, its sister metal. Investors also predicted that the gold to silver ratio should continue to deplete. Here is how the market may look feasible for people to investors in grade metal in 2021.
Physical and ETP demand
Silver is expected to witness a price gain in 2021 due to the dent created by the mining department by the COVID-19 pandemic. Many key silver-producing nations may affect the mine-supply proportion in 2021, leading to higher prices. Various websites, like Indigo Precious Metals, observed instability in gold and silver prices in 2020. Investors like you relied on this price volatility to counter inflation. The same is expected to happen this year.
Market experts predict that the physical silver investment may reach a five-year high value in 2021 with a gigantic investment amount of 236.8 million ounces. The USA, one of the world’s leading economies, witnessed the demand increase by nearly 62 per cent. The exchange-traded product (ETP) is likely to see a significant increase. In 2020, many investors like you diversified their portfolio by investing in hard commodities like silver. 2021 shall also register a rise in investment purchases in the jewellery and industrial domains. These two aspects were significantly affected by the pandemic in the earlier months of 2020 and have gained great pace in investment.
Corporate perspective
Companies across the globe are anticipating a feasible market for gold and silver this year, with nearly 12 market advancements projected in 2021. However, some companies still feel apprehensive about market trends. Even though 2020 witnessed a seven-year high in 2020, it may still not compensate for the disruptions in production. However, full effects of COVID-19 are yet to appear in markets, and the same is expected regarding the benefits of the pandemic for investors.
Lockdown restrictions still persist in many countries leading to mining limitations. Higher silver prices may not suffice for limited mining production. However, the corporate sector is still optimistic about the market trends pertaining to white metal investments.
Predicted prices of silver in 2021
Experts are currently predicting a price rise in silver, based on factors like fundamentals of silver, an increase in mining activity, variable increase in silver supply, etc. Recovery in silver production and supply shall overthrow the global Gross Domestic Product (GDP) in 2021. Silver is expected to trade at a value greater than USD 30, with a 40 per cent increase in its annual average value.
You may also observe great potential in silver participation in clean-energy production. For generating electricity, solar energy shall play a key role in leading to the utilization of photovoltaic cells. Photovoltaics using silver shall also contribute to the optimistic market trend.
Silver, the infamous white-metal, has suffered a blow in the early months of 2020. However, it managed to achieve its seven-year high in the same year, creating a paradise for you to counter the collapsing economy. The same is expected this year with the increasing silver production and mining opportunities. Investment portals like Indigo Precious Metals have predicted the silver investment journey to be quite optimistic this year.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin