Silver Is The Only Precious Metal Likely To Achieve Persistent Deficit Over 2021-22

(December 7th, 2021 - Vladimir Basov)

(Kitco News) - Metals Focus, one of the world's leading precious metals consultancies, expects silver to benefit from an improving gold price in early 2022.

This was reported in Metals Focus' recent release of "Precious Metals Investment Focus 2021/2022", its flagship annual report on investment in gold, silver, platinum and palladium.

"Silver's innate high volatility means that it may well outperform gold early next year," said Neil Meader, Director of Gold and Silver at Metals Focus.

However, after that, prices may weaken, when there will be clearer guidance from the Fed on the timing of the first post-COVID rate hike, the consultancy added.

Metals Focus believes that silver's more favorable fundamentals could offer some price support next year.

"Among the four precious metals, silver is the only one likely to achieve a persistent deficit over 2021-22, marking an end to consecutive surpluses over 2014-20. This turnaround is partly due to strong industrial fabrication," the consultancy noted.

Metals Focus pointed out that on top of a bounce back from COVID damage, there are structural forces at work, including vehicle electrification, the proliferation of 5G technologies and governments' commitment to green infrastructure investment.

"Healthy bargain hunting on price dips by retail investors and the post-pandemic recovery in Indian jewelry and silverware demand should also provide useful support," the consultancy added.

Importantly, Metals Focus said it expects that silver price to mirror gold in 2022, up by 2% to an average of $25.75, but softening in H2.