Data source: International Silver Institute
While the conventional silver demand remains strong, the industrial demand surged 11% in 2023, and another 9% this year to nearly 711 million ounces, a record high.
60% of silver’s global demand comes from industrial users. Silver goes into the making of solar cells that convert sunlight into electricity. Circuit boards, mirrors, batteries, cameras, mobile phones and tablets, appliances and automobiles etc. need a lot of silver. For the same reasons, even data centres that consume a lot of power need silver in large quantities.
Data source: International Silver Institute
Silver’s antibacterial properties are useful in medical tubes, catheters, hearing aids, dental fillings, and even water filtration systems.
Should you buy silver now?
With rising prices, the investment demand for silver is on the rise. India, one of the major importers, is estimated to import about 8,000 tonnes in 2024.
Weddings and other such celebrations in India are almost incomplete without silver jewellery, coins, cutlery, bars and many other objects made of the precious metal. 4.8 million weddings are expected in India between November 2024 and January 2025, according to Confederation of All India Traders, a small retailers’ lobby.
You can invest in silver via futures and options on derivative exchanges. There’s growing interest in exchange-traded funds (ETF) too.
The amount of money managed by silver ETFs — 12 firms offer this investment option — stood at ₹12,000 crore at the end of October 2024 from ₹2,845 crore a year earlier, according to the Association of Mutual Funds in india. Systematic investment plans (SIP) are the best way to invest in silver ETFs.
The more adventurous can go for silver-backed cryptocurrencies like Kau and Litecoin.
Silver hit an all-time high of $49.50 an ounce in 1980 when the Hunt brothers tried to corner the market by buying silver in both the physical and futures markets. In 2024, silver broke past its 12-year high and, according to many experts, more gains are likely in the next 2-3 years.
The 2025 target prices shared by brokers on Wall Street range from $36 to $40 an ounce, which could result in silver costing more than ₹1 lakh in India.
What could ruin the silver party? Watch out for demand cues from the US and China, as well as the geopolitical tensions that may affect silver prices.
(Edited by : Sriram Iyer)
First Published: Nov 25, 2024 12:03 PM IST
