Silver27 May 2021 22:53
'Silver Prices Are Lagging. Investments in Renewable Energy Should Change That.
Silver hasn’t kept pace as other commodities have reached record highs. About the only consolation is that silver has topped an even smaller rise by gold.
They both pale in comparison to the copper rally. Silver may be trading “more like a store of value asset so far this year, versus an industrial commodity,” many of which are up substantially, says Michael Cuggino, president and portfolio manager of the Permanent Portfolio Family of Funds.
That is “not really surprising given the gains of last year,” he says. Silver futures rose 47% in 2020.
Still, silver may “hit higher highs, and higher lows in the coming years” says Cuggino, with pent-up industrial and jewelry demand likely over the next year or so.
Concerns over real or perceived inflation, a lack of capacity investment over the past several years, and a probable decline in the U.S. dollar as the global economy rebounds will also contribute to silver’s price moves, he says.
Silver peaked near $30 an ounce in February this year, following a Reddit post suggesting a short squeeze on the metal. At $27.88 on May 26, prices are up more than 5% for 2021.
Silver is viewed as a metal for jewelry, and copper as an industrial metal, says Collin Plume, founder and CEO Noble Gold. Silver, however, is the “best conductor of energy,” and if the next superpower is the country that conquers energy, “silver is the most important material.”
Plume says silver will most likely top $50 if the Biden administration’s renewable energy plan is approved, raising demand for the metal and leading the market to realize supplies may come up short. Prices saw an all-time high of $48.70 in 1980, according to FactSet.
Silver is used in both solar panels and electric vehicles, and will play a key part in the shift to 5G wireless network technology, says Ed Egilinsky, managing director and head of alternatives at Direxion. That would likely spur silver demand, boosting prices.
https://www.barrons.com/articles/silver-prices-are-lagging-investments-in-renewable-energy-should-change-that-51622109601?mod=hp_DAY_8
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