There’s two reasons silver – both a precious and industrial metal — will hit $US32/oz in 2021, Metals Focus says. That’s 21% up on current levels, and the highest price since early 2013.

Silver price over the past 10 years.

First reason: rising inflation and possible US dollar weakness should continue to favour silver and gold investment as a store of value in the coming months.

Secondly, there’s the industrial side: on top of jewellery demand, the post-COVID ‘green’ economic recovery requires a lot of silver for things like solar panels and electric vehicles.

The average 2sqm solar panel of can use up to 20 grams of silver.

Solar power generation is expected to double by 2025 to about 1,100 gigawatts from just over 600GW currently. That will see the industry consume 1 billion ounces from 2020 to 2030, Metals Focus has previously said.

Current global silver production is just under 1 billion ounces per year.

Then there’s electric vehicles, which each consume between 25 to 50 grams of silver, with additional amounts needed for charging stations, large stationary batteries, and associated infrastructure.

If the number of EVs sold rises to ~30 million in 2028, that’s another 26.5 million to 53 million ounces of silver per year.

“As the demand recovery outpaces supply [in 2021], the [silver] surplus is expected to fall by over 70% to levels similar to 2019 (itself the lowest level since 2015),” Metals Focus says.

“Against this backdrop, silver investment should remain strong among both institutional and retail investors in 2021,” it says.

“With positive investor sentiment and improving fundamentals, further price gains are expected from current levels.

“We therefore forecast silver to rise to a peak of $US32 later this year, with an annual average of $US27.30, achieving a 33% y/y increase.”