When it comes to investing in precious metals, gold usually gets most of the attention. But silver — and silver mining — may now be the better bet.
In early 2017, gains on silver were nearly twice those on gold — and both beat the S&P 500. Despite silver prices fluctuating this year, investment analysts still predict further gains, with silver prices climbing higher in the next few years.
The reason is simple: rising demand at a time of shrinking supply.
The world now uses an increasing amount of silver. Humans have always coveted the shiny metal for coins, jewelry, and all sorts of utensils and serving dishes. But now, silver has become a vital industrial workhorse. It’s crucial for smartphones, flat-panel TVs, solar panels, cars, and many other uses.
In fact, industrial uses now gobble up half of all the global silver production — with demand climbing dramatically.
The increased demand alone is pushing silver prices higher. But prices are also getting a boost from a shortfall in the supply of silver. Because of historical low silver prices, many once-productive mines have shut down and exploration for new mines has slowed.
Buying silver is one way to cash in on these trends. A more clever approach, however, is to invest in promising silver mining companies. One of those is Viscount Mining Corp (TSXV: VML, OTCQB:VLMGF).
Viscount has shrewdly searched out and acquired properties that show huge potential for silver mining, but that have not been developed. For example, Viscount CEO Jim MacKenzie found a property in Colorado named Silver Cliff that had been assessed in the 1980s as containing more than 50 million ounces of silver.
“It hadn’t been developed as a mine, because the exploration company was sold and the property had reverted back to the original owners,” says MacKenzie.
MacKenzie sought out the owners and acquired the property. And Viscount’s own test drilling now shows some of the highest concentrations of silver ore ever found in North America.
The company is now looking for experienced partners to mine Silver Cliff and other properties, which would mean many years of impressive returns for Viscount’s shareholders.
Industrial Demand For Silver To Grow 27% By 2018 – Silver Institute
Growing industrial applications for silver will increase demand for the metal by 27% within the next four years, according to a report released Wednesday by the Silver Institute.
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The report, written by CRU Consulting, a London-based metals consulting firm and published by the Institute, said silver demand is expected to grow by 142 million ounces by 2018 compared to 535 million ounces used in 2013. More than half of the demand will come from electrical and the electronics sector.
The report highlighted eight specific sectors where they see silver demand growing in the next four years: batteries, ethylene oxide, medical, bearings, nanotechnology, automotive, printing and silver inks, and photovoltaic solar panels
“Along with technological improvements, more and more applications of silver have been invented, and more importantly, commercialized; such as nanosilver, solar cells and printed inks,” the CRU analysts said in their report. “Looking ahead, we are bullish on the industrial applications of silver, which will support the total silver demand in the long run. As technologies develop, a variety of new applications are emerging that have the potential for mass consumption, bringing with them prospects for augmenting industrial silver demand,”
The report did not look at silver usage within the photography sector, which accounts for only a small part of overall demand. In total, the report noted that industrial demand for silver in 2013 accounted for almost half of total physical demand world-wide of 1.81 billion ounces.
According to the report, of the eight sectors, the strongest demand for silver will be for photovoltaic solar panels. The report expects that 109 million ounces will be used in solar panels by 2018, up from 88 million ounces consumed in 2013. The analysts said the compounded annual growth rate for this sector was 4.5%
Michael DiRienzo, executive director of The Silver Institute, said since 2012 there has been strong demand for solar technology throughout the Asia-Pacific region, most notably in China, which the report noted accounted for about 54% of global silver PV demand.
DiRienzo added that they also saw strong demand for solar panels in South America and Africa.
“Looking ahead, the Middle East and North Africa represent huge untapped potential as this technology becomes more affordable, and the Indian government aims for India to become a global leader in solar energy over the next three decades,” he said.
West Africa has seen growing demand for solar power; According to recent news reports, since 2009, some villages in Burkina Faso, Mali and Benin have successfully used solar panels to generate electricity as these isolated communities are not part of any national power grid. The project is supported by the UN Development Program.
Although solar panels represent the strongest demand, the sector to see the biggest growth in the next four years will be for silver inks. According to the research demand for silver inks for print was around 2 million ounces, which is expected to grow to 4 million by 2018. The analysts noted that the compounded annual growth rate for this sector was expected to be around 14.9%.
“Printed silver inks are a relatively new technology that has not yet been fully commercialized. One application, within radio frequency identification devices, has already been accepted by the market but another application in the printing of electric circuits, is still at a trial stage,” the report said.
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