To The Moon

Silver was one of the commodities that were constantly mentioned recently by various investors. During this season of banking concerns, people are looking for other asset classes to turn to. Real estate requires significant capital outlay and crypto’s volatility renders this inappropriate for value preservation.

This will bring us to gold and silver as other viable options to cash, stocks and bonds.

Estimated silver reserves left in the world

According to the US Geological Survey, the estimated global silver reserves as of 2021 were approximately 570,000 metric tons. About 1.6 million metric tons could still be mined. A good portion of silver mined is held in bullion and other forms of investment, rather than being available for industrial use.

consumption of silver (annual) since 2017

Since 2017, an annual average of 26,000 metric tons of silver has been consumed. Through the Covid years of 2020 & 2021, we saw a drop in annual consumption.

Applications of Silver

Silver’s unique properties include high thermal and electrical conductivity, reflectivity, and antimicrobial properties. Here are some of the industrial applications of silver.

• Electronics: Silver is used in various electronic applications, including conductive coatings, printed circuit boards, and electrical contacts.

• Solar panels: Silver is used as a conductive layer in photovoltaic cells that generate electricity from solar energy.

• Medical equipment: Silver is used in medical equipment due to its antimicrobial properties.

• Batteries: Silver is used in some types of batteries. By 2030, the global demand for batteries should increase 5 fold.

Silver has competition from copper, aluminium and nickel with similar properties. The performance of these metals is not better than silver but their lower price point has made them more affordable.

Estimated consumption of Silver

Top importers and exporters of silver (2020)

The Silver Institute forecasts that the annual global silver demand will reach around 31,886 metric tons in 2026. This works out to be an increase of approximately 8% from 2021 levels. The demand growth is driven largely by the electronics, solar, and automotive industries & the rising investment demand for silver.

Some ETFs with focus or significant exposure to silver

Some of the most popular ETFs with silver include:

1. iShares Silver Trust (SLV)

2. Aberdeen Standard Physical Silver Shares ETF (SIVR)

3. Invesco DB Silver Fund (DBS)

4. ProShares Ultra Silver ETF (AGQ)

5. ETFS Physical Silver Shares ETF (SIVR)

My investing muse

With UBS buying CS for $3.2B and First Citizen bank buying SVB, the market (27 Mar 2023) has opened with some positive news.

A news article from Fortune stated $1.7T in unrealized losses.

Personally, there are still underlying concerns in the banking sector with over $1.7 trillion of unrealized losses reported. With last week’s interest rate increase of 25bps, this should add to the unrealized losses in the banking sector.

Various analysts are calling for recession and stagnation in the coming months. So long the public is not convinced by the measures taken, silver should remain a good asset for value preservation. Let us do our due diligence before jumping into the queue to buy silver. It may not be a bad idea to keep some silver bullets nearby as we stare at a recession.

@TigerStars

$iShares Silver Trust(SLV)$