Gold’s (GC=F) recent breakout to record highs has also made investors bullish on silver (SI=F).
The commodity often called gold’s “little brother” is hovering above $28 an ounce, up about 23% in the past two months, versus a 19% rise for the yellow precious metal over the same period.
“The typical pattern for silver is: gold is the leader. [It] breaks out first, and within a few months silver takes the lead and catapults past. We’re starting to see that,” John Ciampaglia, CEO of Sprott Asset Management, told Yahoo Finance this week.
The bulls don’t just follow price developments. They also look at demand, especially the growing industrial use of silver in the green energy transition.
“We are seeing very strong buying from India for silver, as well as steady consumption of silver for solar panel use, which is currently being expanded in record amounts around the world,” Ciampaglia said.
The use of silver in industrial applications reached a new high for a third consecutive year in 2023, according to data released Wednesday by the Silver Institute, an industry nonprofit.
“Continued structural gains from green economy applications supported this progress,” the report said, citing higher-than-expected solar capacity and adoption.
The Silver Institute expects supply of the metal to decline by 1% this year, resulting in the second-largest market shortage in more than two decades. The industry group also expects that demand will continue to grow in the coming years beyond the energy transition.
“For example, silver will become an indispensable material as artificial intelligence (AI) increases. End applications expected to integrate silver into AI include transportation, nanotechnology, biotechnology, healthcare, consumer wearables, computing and data center energy,” the report said.
Silver last closed at an all-time high just above $48 an ounce in April 2011.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X @ines_ferre.
