It may sound weird, but the title of the article can be found on a list of shock scenarios recently published by Saxo bank. There are no substantial calculations behind its forecasts, as the purpose of the list may rather be to point out possible shocks and surprises for the global economy for the year to come. However, this shock tactic may have some reason behind it, as some of these forecasted scenarios may be actual possibilities and developments that may unfold during 2021.
One of the most intriguing scenarios suggested by Saxo Bank is the rising demand for silver. Leaving aside the weakening U.S. Dollar, massive stimulus measures - both fiscal and monetary - that may push prices on the assets denominated in Dollars, silver is among the most demanded commodities for production. A global decarbonizing trend, ESG and the rising concern about clean energy may get new recognition after Joe Biden is sworn in as the new President of the United States in January, as he is prominently known as an advocate for “green” technologies. Similar efforts to develop “green” technologies are also being conducted by China and Europe.
Silver, by virtue of its technical characteristics and its high conductivity, is actively used in solar panels and the production of electric vehicles. Such productions may gain additional advantages in coming years. Meanwhile, the production and supply of silver is limited and it is difficult for production and subsequently for supply to be significantly increased in order to meet t rising demand. More than a half of silver production is a byproduct of other nonferrous metals refining.
The widening gap between the demand and supply for silver, its relevance for production, and its use as a financial instrument, may provoke a possible rally in silver prices over the coming months. Silver prices rose along with gold in 2020, from its lows at $11.7 per ounce in March to the highs of $29.9 in August, meaning that the price rose more than twice within six months. So, the idea that the price of silver could double in 2021, is not an extraordinary notion that is too far-fetched.. Technical analysis supports above-mentioned fundamental prerequisites. Silver prices dropped this autumn to $24.4 per ounce. Such correction within the upward trend correlates with a possible target price of $49.4 per ounce. Moreover, the all-time highs for silver prices are at $49.8 per ounce, close to the $50 level that, if reached, would mean doubling of silver prices. Therefore, this doubling of silver prices is not something impossible and we may see silver storming this level in 2021.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.42% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2021 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Telerade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Telerade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.