News Bureau

Silver Market Trends 2019

Despite a lacklustre price performance for silver last year, the Silver Institute expects the sentiment to be more supportive for the silver market in 2019 as the year has already proven to be good for silver investors. For example, the US Mint has sold 12 percent more American Eagles in January compared to January 2018. In addition, the expected slowdown in the US FED rate hiking cycle should also benefit silver, which, in comparison to gold, has a very attractive price point based on the high gold to silver ratio of around 82.

Silver Institute officials offer the following insights on 2019 silver market trends. Silver demand from industrial fabrication, responsible for approximately 60 percent of total demand, is forecast to rise modestly in 2019. Silver demand from brazing alloys and solders as well as electrical and electric applications is expected to rise again this year.

This is on the back of continued demand from the automotive sector, which uses an increasing amount of silver in applications, such as safety features, window defogging and infotainment systems, and for electric and hybrid vehicles. Growth is also forecast in silver’s use in a variety of additional sectors, such as water purification, chemical applications, LED lighting, flexible electronics and screens, as well as anti-microbial applications in textiles.

Photovoltaic (PV) demand has been expanding considerably in recent years due to various countries stepping up the pace to diversify their energy-generating portfolio away from conventional fossil fuels and towards a higher share of renewable sources. Even with legislative changes in China, coupled with global overstocking and continued attempts at thrifting, PV demand will still be very supportive of silver usage, as many governments continue to provide incentives to install more solar power.

India is expected to continue to be one of the largest silver consumers in 2019. Silver imports reached nearly 225 million ounces last year, which was over 35 percent higher compared to 2017.

Jewelry demand is expected to record a solid year of growth in 2019, with Thailand set to be one of the driving forces behind the rise. In the United States, silver jewelry will remain a popular alternative to lower-carat gold items, driven by many issues, especially female self-purchases.

Exchange traded products (ETPs) are forecast to expand by 8 million ounces this year. Silver-backed ETPs are considered ‘stickier’ than other precious metal products, because a majority are held by retail investors, rather than institutional investors.

Silver physical investment demand is likely to increase by approximately 6 percent in 2019. Bullion coin demand has been strong in the United States during January of this year, and the Institute expects sentiment in Europe, which rose by 6 percent in 2018, and India to be supportive of global growth as the year continues. Bullion coin demand in the US fell last year, but non-bullion silver coins rose for the second consecutive year by 42 percent.

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