LONDON, Feb 10 (Reuters) – International demand for silver will rise to 1.025 billion ounces in 2021, its highest in eight years, as traders and trade ramp up purchases, the Silver Institute mentioned on Wednesday, predicting that costs would rise.
The coronavirus outbreak triggered a rush amongst traders to stockpile silver, which like gold is historically seen as a protected place to retailer cash.
That impetus will proceed, the institute mentioned, predicting purchases of bars and cash would rise to a six-year excessive of 257 million ounces in 2021.
It didn’t give a forecast for alternate traded funds (ETFs) storing silver bars for bigger traders, however these have grown strongly to date this yr, serving to push costs to an eight yr excessive of $30.03 an oz on Feb. 1.
Silver can be utilized in industries resembling electronics and photo voltaic panels, and demand will rise because the pandemic is introduced below management and the worldwide economic system rebounds, the institute mentioned.
Industrial demand will rise 9% from 2020 to a four-year excessive of 510 million ounces, it mentioned.
Demand for silver for jewelry will rise to 174 million ounces however stay under ranges seen earlier than the pandemic.
On the availability aspect, mine manufacturing ought to rise to 866 million ounces this yr, essentially the most since 2016, as disruption brought on by the pandemic recedes, and recycled provide will enhance for a fifth yr, the institute mentioned.
The market might be barely oversupplied, its sixth consecutive annual surplus, the institute mentioned. It calculates its supply-demand steadiness with out counting ETFs.
“The outlook for the silver value in 2021 stays exceptionally encouraging, with the annual common value projected to rise by 46 p.c to … $30,” it mentioned in a press release.
“Given silver’s smaller market and the elevated value volatility this could generate, we count on silver to comfortably outperform gold this yr.”
The Silver Institute prepares its experiences with assist from Metals Focus, a valuable metals consultancy. (Reporting by Peter Hobson. Enhancing by Mark Potter)
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