The prospects and challenges for the silver market

Since the U.S. government reported decreasing inflationary pressures, silver has been on an upward trend, even outperforming gold. However, experts warn that the silver market requires a significant shift in investor demand and industrial interest to break free from the pressure around $23 per troy ounce.

Silver Price Outlook for 2023

The silver price is expected to remain around $23 per troy ounce over the next three months. This is due to concerns about long-term higher interest rates, a lack of speculative interest, the threat of a U.S. recession, and reduced physical demand stemming from a weakening Chinese economy.
However, Bart Melek, Head of Commodity Strategy at TD Securities, sees solid potential for silver by the end of 2023. He expects the Federal Reserve (FED) to lower interest rates and for economic conditions to improve in 2024, potentially driving silver prices up to $26 per troy ounce.

Industrial Demand

Melek remains optimistic about the long-term prospects of silver. He anticipates that the price will gain upward momentum when the U.S. central bank begins lowering interest rates, likely by the end of 2023.
Additionally, Melek notes that silver usage in the emerging EV industry, smart devices, electric grids, solar power generation, and conventional industrial products is expected to outpace the quantities produced by miners and recyclers. As global electrification efforts grow to combat climate change, the primary silver market is likely to face persistent shortages over the long term.

Long-Term Silver Expectations

Despite short-term challenges, the long-term potential for silver remains positive. Increasing industrial demand and the global push to address climate change are expected to lead to ongoing physical silver shortages. The use of silver in emerging industries is likely to surpass production levels.
If these shortages persist, the above-ground silver reserves may dwindle to levels insufficient to act as a buffer against scarcity. This could eventually result in significantly higher silver prices.

Investing in Silver

Silver demand is divided between investment and industrial use, with approximately 85% of silver used for industrial purposes. As noted, this demand continues to grow.
Investing in silver is a popular choice for beginner investors, as silver’s relatively low price makes it accessible. With a relatively small investment, you can purchase physical silver as a solid asset.
For these reasons, silver is considered an attractive investment, offering a low entry price and the potential for high returns.

Buying Silver

At The Silver Mountain, you can purchase silver coins, coin bars, and bullion bars. Silver is classified as a raw material, which means bars are subject to 21% VAT. For private buyers, we recommend purchasing silver coins or coin bars, as these are more cost-effective, with smaller differences between buying and selling prices.