Much has been made about how Britain’s departure from the European Union (EU) catalyzed a gold buying spree, propelling the precious metal to a two-year high. Yet the media has somewhat overlooked the rise of silver following Brexit.
Silver has been climbing in value since the Brits voted to leave the EU this past June. It was only a few months ago when silver traded for $15 an ounce. Today, silver is valued at over $20 an ounce.
Why Investors Will Continue to Pump Money into Silver
Though the widespread worry created by Brexit certainly helped spike the value of silver, it is not the lone reason for silver’s increase. The little known truth about silver is that the precious metal’s reserves are rapidly depleting across the globe.
Demand for silver has not slowed in the slightest. Industrial demand for this precious metal is actually increasing as time passes. Yet silver supply is decreasing at an alarming rate. Basic supply and demand economics will result in even higher silver prices.
There is discussion of potential monetary easing in the United Kingdom, China and the EU as a means of stimulating the economy. If such monetary easing becomes a reality, the demand for base and industrial metals like silver will likely increase.
Furthermore, the mere fact that gold has increased in value following Brexit is a positive sign for silver’s future. Gold is widely considered to be a safe haven when uncertainty arises. When the price of gold significantly increases, plenty of investors inevitably take their profits and move them into gold’s pretty sister, silver.
It is a common phenomenon that has the potential to further increase the price of silver as tumultuous developments in global economics and politics continue to scare skittish investors.
Professional Investors are Bullish on Silver
If you put any faith in the opinions of commodity experts, you’ll scoop up silver today. Commodity experts widely agree that metal, specifically silver and gold, have plenty of steam remaining even after their post-Brexit value bump.
Niral Bang Commodities’ head of commodity research, Kunal Shah, recently predicted that silver prices will approach $23 per ounce. Yet he advises that investors buy when the price dips.
Shah believes strong investor demand combined with robust Chinese demand will stoke the flames of silver’s already-hot fire. Shah also commented that the global mine supply of silver is forecasted to decrease this year by upwards of 5% year-on-year. If such a reduction in worldwide silver mine production dips, it would be the first drop in 14 years.
Style Quotient Jewellry’s Chief Executive Officer and Director, Prasad Kapre, recently revealed his bullish silver stance. Kapre described silver as a “great investment”.
Commtrendz Research Director Gnanasekar Thiagarajan publicized his bullish silver outlook, putting a $25 per ounce target on the precious metal. According to Thiagarajan, the demand for silver will continue to rise in the months and years ahead.
Why Silver’s Practical Value Matters
Silver is certainly nice to look at yet it serves a number of different functional purposes. The precious metal is used in photovaltaics and solar energy.
Solar industry experts believe silver will be used even more frequently in the growing sector as we march into a high-tech future. The solar power industry is growing by leaps and pounds. According to Shah, the use of silver in this application has the potential to account for more than 13% of aggregate silver industrial demand this year.
Though laymen might not know of silver’s extensive utility, the precious metal really does provide functional value outside of the solar energy industry. Silver has an array of industrial applications thanks to its inherently high thermal and electrical conductivity.
Recent improvements in nano silver research have positioned silver as the metal of choice for all sorts of home applications. The notion that silver could leak out of such household products and harm the environment is an antiquated one.
Several recent studies have proven this accusation to be a myth, serving as an endorsement of silver as completely safe for use in consumer products.
Silver is also valued for its application in the healthcare industry. The metal is a critically important ingredient in topical creams used to treat burn victims. Silver is also relied upon for the prevention and treatment of infections, corns and warts.
From radiology to prostheses, implants, catheters and bandages, the utility of silver is seemingly endless. The post-Brexit panic is only one piece of the valuable silver puzzle. There is much to silver’s dramatic rise than allegedly myopic investor interest. Look for silver to continue its upward ascent as time progresses.
Regards,
Ethan Warrick
Editor
Wealth Authority
