In the realm of precious metals investment, silver often follows in the wake of gold’s price movements. Over the past two years, gold has seen a substantial increase, reaching new historical highs. This trend suggests that silver could soon reach new heights as well. Historically, while silver’s rise usually lags behind gold, once it starts to climb, it often surpasses gold’s gains, a pattern observed again this year.
From an investment standpoint, when inflation rises, some investors turn to commodities like precious metals to preserve stability and purchasing power. Prices of these commodities tend to increase with inflation, providing a hedge against it.
Silver’s demand encompasses an important segment similar to gold’s—jewelry. However, silver stands out due to its significant industrial applications, including use in solar panels, electric vehicles, and electronics.
According to the Silver Institute, both 2022 and 2023 saw record silver demand, with supply shortages for the third consecutive year. Looking ahead to 2024, supply is expected to see a slight increase, while demand is projected to grow by 11%. This sets the stage for one of the largest supply deficits in two decades.
Technological advancements, especially in green technology, are driving new demand for silver. Solar panel production, which heavily relies on silver, is expected to grow by 30% over the next five years. As the world shifts towards sustainable and green energy, silver demand is anticipated to rise accordingly, pushing prices higher. The accelerating electric vehicle market, which requires a substantial amount of silver for batteries and electronic components, is another catalyst for silver’s price increase.
JPMorgan forecasts that owing to ongoing industrial demand growth, silver prices could rise from the current $25 per ounce to $40 by 2025.
Compared to gold, the silver market is considerably smaller, leading to greater volatility and less liquidity, which can be a downside for investors. However, long-term investors might overlook these fluctuations, especially if they’re prepared for short-term price swings, given the promising prospects of silver’s industrial applications.
For investors interested in silver stocks, here are four noteworthy U.S. stocks to consider:
As the demand for industrial and green technology grows, these silver stocks are positioned to potentially offer significant returns to savvy investors.
