Silver, like gold, is considered a defensive investment asset in conditions of instability, as well as a traditional inflation hedge instrument. Silver could be in a more privileged position in the near future as industrial demand for it grows.
Silver has always been used to produce items ranging from jewelry and batteries to chips and medical equipment. Recently, however, this precious metal has become indispensable in the context of solar and electric vehicle production. It is in this sense that the future looks very promising for gray metal.
Here's what Paul de Souza, senior investment consultant at Sightline Wealth Management LP (Canada), said about this: "The silver rate is supported by a very important factor. Silver is an increasingly important component in industrial materials due to the launch of environmental initiatives in the largest countries of the world. "
Demand for silver could grow substantially in the coming years as Joe Biden, the president of the United States, signed a bill to reduce inflation, which involves tax breaks and grants for companies that make solar panels and environmentally friendly cars. It's about billions of dollars.
According to de Souza, investors need to track the state of industrial demand for silver. At the same time, the expert added that the demand for silver will exceed its supply.
Recall that in 2021, about 870 million ounces of silver were produced, and the volume of demand amounted to more than 1 billion ounces. At the same time, the deficit was covered by processing.