Due to the logistics and economics of precious metal mining, only 8 or 9 ounces of silver are extracted for every ounce of gold extracted. Simply put, when stock prices struggle for an extended period of time, investors turn to safer assets, such as silver and gold. While the silver price forecast is affected by supply and demand, it is also heavily influenced by investors who buy precious metals as safe haven assets during times of economic or political uncertainty. At its current level of approximately 80, the ratio suggests that investment in silver is preferred over investment in gold.
Therefore, one of the driving forces behind the increase in silver prices over the next five years is the numerous applications of white metal in green technologies and the green economy. The same is largely the case with gold prices, but silver is subject to considerably greater volatility than gold. Based on the price action of silver and gold on February 10 and 11, that impulsive movement may now be underway. Despite the saving of metals, which has already reduced the silver content in photovoltaic cells by 80% over the past decade, demand is expected to grow over the next five years.
While this expectation of rising rates may be doubtful, this evolution would have a more pronounced effect on gold than on silver. While yields have historically been lower compared to riskier assets and precious metals, it seems very clear that silver is an investment that can be trusted despite trials, difficulties and decades of market uncertainty. Jeffrey Christian, managing partner of the CPM Group, believes that while the prices of gold and silver may be suffering a short-term hit, investors with a longer-term market view may view this fall in prices as an opportunity. When political and economic uncertainty abounds, currencies tend to take a back seat to assets such as gold and silver.
It could also increase silver requirements for the manufacture of photovoltaic (PV) panels, which are mainly imported from China, analysts at Heraeus Precious Metals said in their May evaluation.