The world was going to run out of silver. By the end of the year, global demand is expected to rise sharply, creating the largest gap between demand and supply in decades.
The Silver Institute, a US-based group that tracks the metal, said in its most recent report that the world is about to face a major shortage of silver.
According to a report on the agency’s website, global demand for silver from industrial users, jewellery and housewares makers, and individual investors is expected to rise by a record 16% from last year to a new all-time high of 1.21 billion ounces by the end of 2022. This is a record high.
Because of this, the silver market has a long-term deficit of 194 million ounces of the metal, which is four times the amount seen in 2021. (48 million ounces). The report said that the amount of silver stored in London and New York, which is kept track of by COMEX and the London Bullion Market Association (LBMA), had already dropped by about 370 million ounces, or 25%, so far this year.
The agency says that one of the main reasons for the rise in silver demand is the rise in the amount of silver used by automakers. This rise is happening because more electronics are being used in cars. Demand is also affected by how many people use 5G technologies and how much the world wants to use green energy. For example, companies that make solar panels are stockpiling the metal more and more. Lastly, India’s silver demand nearly doubled this year because people took advantage of low prices to stock up on silver after supplies dropped in 2020 and 2021.
This year, the price of an ounce of silver has dropped by about 10%, to $21. This is mostly because investors are selling the metal because the US dollar is getting stronger and bond yields are going up.