As inflationary expectations continue to mount amid theatrical monetary easing policies and fiscal spending measures across several key markets including the US, the demand for precious metals has been increasing rapidly. The demand for gold has skyrocketed since the beginning of the year, causing prices to surge to historically-high levels. Likewise, the demand for silver has also risen, and thus has caught the attention of investors that not only want to hold a safe haven asset but also leverage themselves against gold.
According to data compiled by the Silver Institute, global silver-backed exchange-trade products’ holdings increased by 297 million ounces within the first three quarters of the year, which amounts to nearly triple the growth compared to the same period only a year ago. The organization also noted that the demand for silver bullion coin rose 65% in those three quarters of 2020, predominantly fueled by US and German markets. In the meantime, silver bar demand has also been on the rise, but growth was partially offset by weakened demand in India amid the emergence of price-led liquidations.
The Silver institute pointed out that demand for silver in industrial settings has also been showing some signs of recovery amid widespread global coronavirus shutdowns. However, despite the demand improvement stemming into the fourth quarter, the organization forecasts a tapering-off by nearly 10% on a year-over-year basis as a result of the pandemic. Correspondingly, the Silver Institute anticipates that the current macroeconomic backdrop will likely continue to support silver investment demand for the remainder of 2020.
Information for this briefing was found via the Silver Institute. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.