Silver price to rise 30% in 2021 as industrial demand rebounds – Commerzbank


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(Kitco News) – While gold will continue to garner a lot of attention in 2021 as prices are expected to hit new all-time highs, Commerzbank analysts suggest investors are keeping their eyes on silver.

In their Precious Metals Outlook 2021 report released last week, analysts at the German Bank expect silver to continue to outperform gold as improving global economy spurs recovery. industrial demand for precious metals.

Looking at prices, Commerzbank sees silver averaging next year around $ 26.50 an ounce. Prices are expected to peak at around $ 32 an ounce by the fourth quarter of 2021. Commerzbank’s silver outlook is about a 30% gain for the year from current prices. March silver futures traded for the last time at $ 24.62 an ounce. Meanwhile, Commerzbank sees gold prices peaking at $ 2,300 by the fourth quarter of next year, representing a gain of 24% over the next 12 months.

“The arguments for a further increase in the price of silver are, in our opinion, overwhelming. The influx of cheap silver is likely to lift not only gold but also silver, which in addition still has potential to catch up with gold. Economic recovery is also expected to stimulate industrial demand. So we expect silver to resume its uptrend, ”analysts said.

Although industrial applications for the metal are expected to resume next year, Commerzbank said investment demand will remain the main price driver in 2021.

“Industrial demand is expected to pick up in 2021, as the factors that have weighed on the economy this year may lose their influence. With the availability of effective vaccines and the progression of vaccination of the population, the risk of further blockages and supply problems is expected to be significantly reduced, ”analysts said. “However, mining production is also expected to return to normal. The two effects are likely to cancel each other out. Thus, it will likely depend on the other components of demand in which direction the pendulum swings in market equilibrium.”

One of the main money worries is the prospect of a new administration in the White House pushing the development of renewable green energy technology, analysts said.

“Biden wants to restructure the US economy in the direction of carbon neutrality and for this reason wants to massively push solar energy. Construction of 500 million solar panels is planned over the next five years. depends on the situation of the majority in the US Senate, whose second round will be decided in early January. In Europe, too, the trend towards climate-friendly energy is expected to continue and encourage a further increase in solar capacity, ”analysts say.

The bank also noted that although silver is an important component of solar panels, the amount of metal actually needed has declined.

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

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