According to Incrementum’s 15th annual “In Gold We Trust” report, silver might be “the main winner of both monetary and meteorological climate change.”
Silver already has supply and demand circumstances that are highly advantageous for investors. Coming off mine closures during the COVID 19 pandemic, the supply of silver remains depressed, even as the metal faces increased demand, due to its numerous uses as an industrial metal and its value as an inflation hedge.
An estimated 100 million ounces of silver will need to be mined to meet projected demand, roughly 10% of the current market.
“I don’t see a lot of 10 million ounce mines coming online in the next 5-10 years,” Marina Smirnova said in an episode of Sprott Gold Talk radio.
According to the Incrementum report’s authors: “Contrary to the widespread belief that everything will be the same after the Covid-19 pandemic, we are convinced that after 40 years of a disinflationary climate we are witnessing a fundamental shift towards an inflationary climate. Therefore, investment demand for silver will be the most important price driver in the current decade.”
Silver: The Next-Gen Metal
In 2020, silver climbed 47.89% in value, despite the overall economy shrinking in the pandemic.
Often thought of as gold’s “lesser” cousin, silver is starting to attract additional attention because of its uses in environmentally friendly technologies. It is also a key component in 5g cellphone towers and for the automotive industry.
Most internal combustion cars use between 15g and 28g of silver. But hybrid cars – which rely on the metal’s unique electrical properties to function — have an even greater load of 18g to 34g. Battery powered vehicles could need upwards of 50g.
Currently hybrid cars make up roughly 8.2% of the market. But as green initiatives are implemented by governments around the world, this number is primed to explode—which means more demand for silver.
Given this outlook, physically backed ETFs like the Sprott Physical Silver Trust (PSLV ) can offer investors an opportunity to get exposure to the metal.
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