Global silver market forecast expected to shine in 2020


WASHINGTON, Feb.12, 2020 (GLOBE NEWSWIRE) – The Silver Institute estimates that macroeconomic and geopolitical conditions will remain broadly favorable for precious metals, encouraging investors to remain overall net buyers of silver, a development that is expected to push up gold prices. ‘money this year. Additionally, we are seeing continued growth in physical silver investment and we expect the use of silver as an industrial metal to increase in 2020.

However, there will be times when the money will have to deal with issues, such as the current health crisis in China, which could hit that country’s economy hard.

As such, the Silver Institute provides the following information on silver market trends in 2020.

Money request

Become thin industrial money collection (representing just over half of total demand in 2019) is expected to pick up in 2020, reversing two years of marginal losses. While weak economic conditions, especially in China, remain an obstacle to industrial production, a repeat of last year’s destocking along the supply chain (due to the trade war) is unlikely. Reloading this pipeline should provide additional boost to demand this year. We forecast a 3% increase in industrial demand for silver, which would be broadly in line with the International Monetary Fund’s forecast of 3.3% for global GDP growth this year.

Demand from the electrical and electronics sector should account for the bulk of the gains. The use of silver in the automotive industry, for example, is expected to experience impressive growth. Despite weaker global car sales, the demand for silver is expected to benefit from the increasing sophistication and electrification of vehicles. The use of money in 5G infrastructure and upcoming smart electronics is also expected to fuel demand gains.

The outlook for the photovoltaic (PV) sector looks mixed. The government’s continued support for renewable energy to combat climate change and lower prices for finished PV modules are expected to boost global PV installations. Actual silver consumptions, however, could be offset by continued efforts to reduce silver burdens. Overall, the demand for silver in the PV sector is expected to decline slightly, but even so, the total will remain near record highs.

Global jewelry demand is expected to maintain modest growth this year. India remains the main engine of growth, driven by the continued penetration of 925 sterling jewelry, more commonly sold in urban areas of this country. In the United States, consumption of silver jewelry is expected to remain healthy, driven by stronger online sales. A marginal increase is also planned for silverware manufacturing this year. Like jewelry, the growth of this segment will be almost entirely dependent on India.

Money holdings exchange traded products (FTE) are expected to remain high in 2020. Profit taking in FTEs is expected to be limited, even with rising prices. These holdings tend to be relatively stable, reflecting the importance of retail investors in this market, who often adopt a longer investment horizon than many short-term professional investors. At the same time, persistent macroeconomic uncertainties should also favor safe-haven assets, which will encourage further allocations to silver ETPs.

Physical investment in money, which consists of purchases of coins and silver bullion bullion, is expected to increase for the third year in a row, up around 7% in 2020. This partly reflects a continued recovery in Western markets where improvement price expectations and rising prices volatility will prompt new purchases.

Money supply

Silver mine production is expected to increase by 2% in 2020, making it the first annual increase in five years. This growth will be in part due to the contribution of several recently commissioned mining operations and the ramp-up of several mine expansions until full production.

Silver Scrap Supply is expected to increase for the fourth consecutive year, albeit to a small extent, reflecting the continued expansion of capacity in the ethylene oxide market. Rising metal prices could also boost jewelry and silverware waste in price-sensitive markets like India.

The money market is expected to end this year with a structural surplus (total supply minus total demand) of around 15 million ounces. At this level, the surplus would be the lowest in five years.

Silver price

Silver saw a noticeable improvement in investor sentiment in 2019, bringing the average annual price of silver to its first increase in four years, up 4% to $ 16.21 (based on the price of silver). London Bullion Market Association Money). The rise in prices was supported by a marked move towards looser monetary policies, as concerns grew about the global economic outlook, exacerbated by the ongoing trade war between the United States and China.

The outlook for silver remains positive, with the annual average price expected to rise 13% to a six-year high of $ 18.40 in 2020. This recovery is largely driven by the positive fallout from gold gains as the The yellow metal continue to benefit from macroeconomic and geopolitical uncertainties in critical economies. Concerns about the state of the global economy will have possible negative consequences for industrial metals and, by extension, silver. However, the weight of institutional silver circulating in a relatively small market should prove to be enough for silver to outperform gold, and could cause the gold / silver ratio to drop in the mid-1970s later this year.

Metals Focus, the respected global precious metals research consultancy, contributed to this analysis. The company will research and produce the 30e edition of the annual report of the Silver Institute on the international silver market, Global Money Investigation. This report will be released on April 15, 2020.

Michael DiRienzo
+1 202-495-4030

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