Silver is one of the most popular precious metals that has been used for various purposes for centuries. In recent times, the demand for Silver has been increasing due to its various applications in different sectors, including electronics, solar panels, medical devices, and jewelry. With the current macroeconomic challenges, investors are turning towards Silver as a safe haven asset. In this article, we will discuss ANZ Bank Strategists’ outlook for Silver’s prices and the factors that are driving the trend.
The Bullish Outlook for Silver:
ANZ Bank Strategists are optimistic about Silver’s outlook for 2023 and beyond. According to their analysis, the fundamental backdrop and macroeconomic challenges are likely to drive institutional investors back to Silver this year. The demand for Silver is expected to remain strong, with some leveling-off, while the supply is estimated to fall short by 140moz, which is 12% of demand. These factors are expected to support Silver’s prices in the long term.
Factors Driving the Trend:
There are several factors driving the trend for Silver’s prices. Firstly, the global economy is currently facing several macroeconomic challenges, including inflation, geopolitical tensions, and uncertainty around the COVID-19 pandemic. In such an environment, investors are turning towards safe-haven assets like Silver to protect their portfolios from market volatility.
Secondly, the demand for Silver is increasing due to its various applications in different sectors. For instance, the demand for Silver in the electronics sector is growing due to the increasing use of electronic devices worldwide. Similarly, the demand for Silver in the solar panel industry is also rising due to the shift towards renewable energy sources.
Thirdly, the supply of Silver is facing several challenges. The production of Silver is declining due to lower ore grades and higher costs of production. Moreover, the COVID-19 pandemic has disrupted the mining supply chain, leading to lower production levels. These factors are likely to keep the supply of Silver tight, leading to higher prices.
While ANZ Bank Strategists are bullish on Silver’s outlook, there are some potential risks to consider. Firstly, the demand for Silver may not grow as expected if the global economy slows down. Moreover, the COVID-19 pandemic may continue to disrupt the supply chain, leading to lower production levels.
Secondly, there may be a significant shift towards other safe-haven assets like Gold and Bitcoin, which could impact the demand for Silver. In such a scenario, Silver prices may not rise as expected.
In conclusion, ANZ Bank Strategists are bullish on Silver’s outlook for 2023, with prices expected to reach $26 by the end of the year. The strong fundamental backdrop and macroeconomic challenges are likely to drive institutional investors back to Silver this year. While there are potential risks to consider, the long-term outlook for Silver remains positive due to the increasing demand and tight supply. Investors who are looking for a safe-haven asset may consider adding Silver to their portfolios.