• 19 days Could Crypto Overtake Traditional Investment?
  • 23 days Americans Still Quitting Jobs At Record Pace
  • 25 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 28 days Is The Dollar Too Strong?
  • 29 days Big Tech Disappoints Investors on Earnings Calls
  • 30 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 31 days China Is Quietly Trying To Distance Itself From Russia
  • 32 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 36 days Crypto Investors Won Big In 2021
  • 36 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 37 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 39 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 39 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 43 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 43 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 43 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 46 days Are NFTs About To Take Over Gaming?
  • 46 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 49 days What’s Causing Inflation In The United States?
  • 50 days Intel Joins Russian Exodus as Chip Shortage Digs In
Hawkish Fed Sends Gold Prices Crashing

Hawkish Fed Sends Gold Prices Crashing

The gold bulls are facing…

U.S Targets Russian Gold Stockpiles

U.S Targets Russian Gold Stockpiles

In its latest round of…

Is It Time To Pay Attention To Gold Miners?

Is It Time To Pay Attention To Gold Miners?

The invasion of Ukraine by…

  1. Home
  2. Commodities
  3. Precious Metals

Solar Boom Could Send Silver Prices Higher

Silver

Saxo Bank projects silver will soar to a record $50 an ounce in 2021, powered by loose Federal Reserve monetary policy and a weak dollar, and turbocharged by surging demand for the white metal in the solar energy sector. According to the Saxo Bank report, the “usual suspects” will continue to power silver upward, referring to the extraordinary monetary policy we’ve seen in response to the coronavirus pandemic in 2020.

Saxo analysts expect the US dollar to continue to weaken even as the pandemic eases with the rollout of a vaccine next year.

The vaccine has killed the virus, but not killed the debt that is still flushing around the world.”

This reflects Peter Schiff’s view that a vaccine can’t cure what ails the economy.

The problem is not really the fact that we have a disease, but that we’re addicted to the cure, which was cheap money and all this debt. And so now, it’s the addiction to the cure that’s the real problem. The disease doesn’t even matter anymore. Because even if we get rid of the disease, we’re still addicted to the cure. And the Fed can’t take away the cure without causing an even bigger problem than the initial disease that the cure was meant to cure because now the problem isn’t the disease.”

Saxo Bank also projects rising price inflation in 2021. The report predicts policymakers will be slow to respond to rising prices because they want to “offer maximum support for their still-recovering economies.”

With a Covid-19 vaccine in rapid roll-out by the middle of the year, the excessive liquidity and over-easy policy drives a powerful bid into any hard asset.”

Related: The Top U.S. Shale Gas Basin Continues To Bleed Cash


This is bullish for both silver and gold.

Earlier this year, the Federal Reserve moved the goalposts to allow inflation to run hot. As Schiff noted at the time, by injecting so much stimulus into the economy in the past, the central bank has created a situation where it can never actually fight the inflation that it creates.

That’s why the Fed is now saying we’re going to let inflation run hotter – because they have no choice. It’s not because this is good for the economy. It’s not. It is necessary to keep the bubble from deflating.”

With the monetary fundamentals already looking strong for silver, the white metal will get a further boost from growing demand for applications related to the “green transformation,” particularly photovoltaic cells used in solar panel production. Saxo projects demand will outstrip supply.

In fact, a real silver supply crunch is on the cards in 2021, and it frustrates the full-throttle political support for solar energy investments under a Biden presidency, the European Green Deal, and China’s 2060 carbon-neutral goal, among other initiatives.”

Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute.

Silver possesses the lowest electrical resistance among all metals at standard temperatures. According to the report, “Potential substitute metals cannot match silver in terms of energy output per solar panel.”

Further, due to technical hurdles, non-silver PVs tend to be less reliable and have shorter lifespans, presenting serious issues for their widespread commercial development.”

Related:

Iran Expects To Sell 2.3 Million Bpd In 2021

Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.

On the supply side, silver mine output was hit hard by the pandemic. Production is projected to fall by 6.3% to about 780.1 million ounces in 2020.  The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.

Long-term, Saxo Bank points out that more than half of mined silver supply is a by-product of zinc, lead and copper mining, “making it tough for miners to meet the surging excess proportional demand for silver.”

Silver is historically more volatile than gold because due to industrial demand, but the solar power industry should help steady overall industrial demand for the white metal.

Looking at the bigger picture, at its core, silver is a monetary metal and it tends to track with gold over time. The silver-gold ratio of over 76-to-1 tells us the white metal is still significantly undervalued compared to gold. History tells us silver will eventually close the gap, meaning either gold will drop or silver will rise. Given the economic dynamics and the current extraordinary monetary policy, a continued gold bull run seems more likely and silver will probably come along for the ride boosted by increasing industrial demand.

By Zerohedge.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment