Silver forecast to cross the US$30 level in 2021

Silver annual average likely to rise by 40 percent! 

What’s the silver outlook for 2021? Market watchers are optimistic that silver will continue its price gain and outshine gold! Such points are focussed in the recently published report, Silver Price Forecast and Silver Stocks by INN. 

The report says, the 2020 silver market was resoundingly resilient in the face of many challenges. While Covid-19 bore down on most commodities, silver displayed its best performance in a decade. From its lowest to highest point this year, silver climbed an impressive 137 percent; that’s compared to gold ‘s increase of 38 percent over the same time horizon.

The white metal also reached a seven year high in August, trading for US$28.32 per ounce after sinking to an 11 year low of US$11.59. 

The comeback highlights silver’s ability to outperform gold. Now holding in the US$23 price range, analysts and sector participants are optimistic that the precious metal will continue its price gain and outshine its sister metal gold. 

“Once the gold rally resumes, tactical buying will help fuel further price gains for silver,” Neil Meader, director of gold and silver at Metals Focus, wrote in a recent report. “This should help silver outperform gold, which we believe will see the gold:silver ratio continues to fall during 2021.”

One factor that may contribute to higher prices in 2021 is the impact of Covid-19-related closures this past year. Lockdown measures in key silver-producing countries are likely to affect mine supply tallies from this year, which could spur price growth. 

“The impact of COVID-19 on silver supply has been the same as for gold, only more pronounced because mined silver supply is much more concentrated in the major producing countries,” noted Adam Webb. Webb, who is director of mine supply at Metals Focus, went on to explain that Mexico, Peru and China accounted for 52 percent of global mined silver output in 2019. 

“This year mines in all three countries were temporarily suspended due to Covid-19 restrictions, with Peru in particular heavily impacted,” said Webb. “As a result, we are expecting mined silver supply to decline by 6.3 percent year-on-year, a greater drop than for gold.” 

Silver price to hit US$30: 

At the juncture, the report said about Silver outlook 2021 that, for 2021, Metals Focus is forecasting added investment inflows, “driven by positive spillovers from gold and the white metal’s high beta.” The metals consultancy anticipates that silver will trade well above the US$30 level, with its annual average rising by 40 percent.

“Looking at silver’s key fundamentals, a recovery in mine production and scrap will see global supply reach a seven-year high,” reads its precious metals review. “The recovery in silver industrial application is expected to outpace global GDP growth, with offtake in 2021 almost matching the 2019 total.” 

For US Global Investors’ Aldis, silver’s use in the burgeoning clean energy sector is exciting, especially in relation to green hydrogen, which requires massive amounts of electricity to produce, If that electricity is to be generated cleanly, then solar will play a key role, making photovoltaics using silver important. 

“I think the bigger trend really is just going to be just talking about reducing global greenhouse emissions. And it’s going to have to be accomplished by more power generation using silver,” said the portfolio manager. “That’s going to be the biggest key in terms of creating the largest-scale demand for silver -you know, it’s going to be stronger than the … exchange-traded funds I would think.”