The global demand for silver, according to the Silver Institute, is reportedly expected to rise by 16 per cent this year in what is likely to create the biggest deficit in decades.
The institute said that the “use of silver by industry, for jewelry and silverware and for bars and coins for retail investors were all forecast to reach record levels.”
Demand in India almost doubled in 2022 as buyers took advantage of low prices to replenish stockpiles drawn down in 2020 and 2021, as per Reuters.
“Exchange traded funds (ETFs) storing silver for investors shrank, however, returning metal to the market, but the Silver Institute does not count ETFs as physical demand because they only store wholesale silver bars and do not rework them,” the news agency says.
According to Philip Newman, a consultant Metals Focus, the demand for silver is likely to fall next year.
“India’s restocking is likely to trip over into 2023 but at some point will dissipate…By extension, you could see some decent figures in 2023 but it may not match 2022,” he said.
Newman, who argues there was plenty of silver left, said “he expected strong demand from industries such as solar panel and auto makers and more silver supply deficits in the coming years, but not as large as in 2022.”
“The amount of silver stored in vaults in London and New York monitored by the COMEX exchange and the London Bullion Market Association has fallen by around 370 million ounces – or 25 per cent– this year,” Reuters reports.
The decision by financial investors to sell silver “in response to rising U.S. bond yields and a strengthening dollar” has led to the fall of Silver prices by around10 per cent this year to $21 an ounce.