Silver: the little brother and the big trends

The price of silver has taken off in recent weeks – in the slipstream of gold, as the saying goes. However, silver is not just following suit, it has its own drivers, particularly demand from the solar and computer industries. “The precious metal is therefore benefiting from the current megatrends,” says Carsten Gerlinger, Managing Director and Head of Asset Management at Moventum AM.

Silver is considered the “little brother” of gold, whose price rose significantly between February and April. In May, silver also went up, climbing to an eleven-year high of over 32 dollars per troy ounce. At the end of May, it was trading at just over 31 dollars, which means it has gained 30 percent this year. Compared to mid-February, the increase is even over 40 percent. However, the record levels of 2011, when silver broke the 40-dollar mark for a few months, are still a long way off.

“There are some indications that the rise is not over yet,” says Gerlinger. After all, silver is not only a financial investment and a precious metal, but is also used primarily as an industrial metal. It is used in solar systems, for example, and in modern solar cells it is used for the conductors and contacts. It was therefore the growing demand from China’s booming solar industry that contributed to the recent price increases. However, it is not only the photovoltaic industry that needs silver as a superconductor, but also the computer chip industry.

“Silver is therefore a component of products that are increasingly being sold as part of megatrends,” explains Gerlinger: “Artificial intelligence and decarbonization.” The fact that the growing demand is being offset by a supply of silver that is unlikely to increase significantly in the medium term is having a price-supporting effect.

About Lisa Baker, Editor 2419 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.