2020 Round Up
According to a recent report by Metals Focus, consumer demand for silver coins and bars is thought to have exceeded 200M ounces in 2020; the highest level in four years. The US- the world’s largest silver coin and bar market- experienced particularly high demand, followed closely by Germany. In fact, India was the only key retail investment market to experience a slow-down in demand. This decline is thought to be due to a combination of COVID-19- which had a negative impact on disposable incomes and bricks and mortar bullion retail outlets- and a record high Rupee silver price, which resulted in substantial liquidation amongst Indian investors.
2021 Performance So Far
So far in 2021, silver has continued to shine, although demand continues to be weaker in India, as many COVID-19 restrictions are still in place. Nevertheless, elevated demand in the US and Europe has more than compensated for the slower demand in India.
Interestingly, as the price of gold pulled back earlier in the year, silver held up well and slightly out-performed the yellow metal. This left the gold:silver ratio fluctuating close to seven-year lows.
In February 2021, the much publicised Reddit phenomenon sent the silver price soaring to an eight-year peak. Social media traders piled into buying shares in silver mining companies and exchange traded funds (ETFs) backed by physical silver bars in an attempt to replicate the GameStop short squeeze. Whilst the social media frenzy has since abated, demand for silver has remained strong during March and April. At The Royal Mint, demand for silver has been unprecedented throughout March and April 2021. Demand for silver bars increased by an incredible 540% compared to the same period in 2020 (the height of the pandemic) resulting in stock shortages for many lines. One-ounce silver Britannia 2021 coin sales also surged by over 100% during this period, with the new state-of-the-art security features proving extremely popular with investors all over the world.
The Outlook
Many analysts, including those at Metals Focus, predict a bright future for silver for the remainder of 2021. Accommodative monetary and fiscal policies- traditional drivers for demand in precious metals- are expected to remain in play as the economy continues to recover from the pandemic. Furthermore, silver’s use in emerging green technologies have also contributed to the positive sentiment towards the metal.
With silver still shining brightly, could this be a good time to add to your portfolio? Invest today.
