Silver prices jumped by $3.77 per kg to $28.04 per kg from Aug. 4 to Aug. 6. This is the highest price level registered since 2016 and is due to the global economic uncertainty triggered by the pandemic. Analysts say this is pushing investors to seek shelter in precious metals.
These high price levels are mainly due to inflation fears, low interest rates. and the recognition of silver’s role as a valued investment, according to Michael DiRienzo, executive director at The Silver Institute.
“If this upward trend will continue, or if silver price will stabilize at current levels, is difficult to fathom,” he told pv magazine.
However, it is clear that such prices will not affect the PV industry, which relies on silver for solar cell manufacturing.
“We are far away from any critical threshold that would make silver supply for the solar industry, but also for other industrial sectors, a real problem,” he explained. “I don’t see any impact coming for the PV manufacturing industry, even considering that this year a 7% reduction in silver global demand is expected.”
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DiRienzo said it is difficult to quantify the critical price threshold that would affect the PV sector. “We are far from reaching that level,” he insisted.
According to a recent study by the University of Kent, silver accounts for around 6.1% of total PV module production costs.
The Silver Institute said in July that the Covid-19 crisis negatively affected silver fabrication demand in the first half of the year. “After a sharp contraction in the March-April period, silver industrial demand has shown signs of improvement from May onwards after many key economies gradually lifted lockdown measures,” it said. “However, weak consumer confidence and a sharp rise in unemployment weighed on demand in many end-user applications such as automobiles and consumer electronics.”
A report published by The Silver Institute in April predicted that prices would only fall 3% this year, despite the impact of the pandemic on demand. That study predicted that solar manufacturing demand for silver would fall 3% from 98.7 million ounces last year to 96.1 million this year. However, the pandemic and its impact on the global economy have clearly changed this scenario.
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I think by the look of it, Bloomberg thinks copper and zinc will go ahead of Gold/Silver in value. This is Crazy, just because the world is in a Crisis, doesn’t mean we pay for it by raising the Commodity value of these types of Metals.