U.S. Silver Eagle sales this year are RED HOT pushing total silver investment demand to record highs. According to the U.S. Mint’s most recent update, Silver Eagle sales in 2020 have surpassed 30 million and may continue to increase over the next few weeks in December. Also, for the first time ever, total silver investment demand exceeded industrial demand by a wide margin.
So, for the analysts who continue to harp on “Industrial Demand” as an important factor for the silver market to focus on in the future, I say… RUBBISH. And, if you have been reading my analysis for several years, I’ve stated over and over again, that industrial demand will become less of a driver of the silver price in the future.
Thus, when I read the Zerohedge article today, Saxo Bank, 2021 Will Be A “Reality Check On Extend-And-Pretend” – Saxo Bank Unveils Its ‘Outrageous Predictions’ For The Year Ahead, quoting the following about silver in 2021.
Sun shines on silver, which sizzles on solar panel demand
2021 brings the usual suspects that power silver higher on its hard asset/precious metal side as the US dollar weakens, and as investors are faced with the harsh reality of no relief in sight from negative real interest rates. This is exacerbated as inflation suddenly jolts higher in 2021, and policymakers are slow to respond, wanting to offer maximum support for their still-recovering economies. With a Covid-19 vaccine in rapid rollout by the middle of the year, the excessive liquidity and over-easy policy drives a powerful bid into any hard asset.
Turbocharging the rise in the silver price in 2021, even relative to gold, is the rapidly rising demand for silver in industrial applications. In fact, a real silver supply crunch is on the cards in 2021, and it frustrates the full throttle political support for solar energy investments under a Biden presidency, the European Green Deal, and China’s 2060 carbon neutral goal, among other initiatives.
While Saxo Bank analysts get it right about a likely “Silver Supply Crunch” in 2021, their focus on Solar Power as a leading factor for the silver market in the future is typical of a financial industry that is stuck on STUPID. Gosh, I hate to be so BLUNT, but there it is.
If I hear one more analyst regurgitate about the “WONDERS” of future silver PV Solar demand, I will send them the following chart.
According to the new Silver Important Role In Solar Power Report by CRU Consulting for the Silver Instutite (June 2020), silver consumption in PV Solar Cells will continue to trend lower until 2026 and then remain flat until 2030. Also, the Metals Focus Consultancy stated in the Silver Institute’s 2021 Interim Report, that silver demand in PV Solar will fall 11% in 2020.
The falling silver consumption in the Solar Industry has to do with the PV cells becoming more efficient and a flattening of new solar installations.
Regardless, the notion that silver industrial demand will continue to be a key factor in the future becomes LESS IMPORTANT when we look at the following chart.
The 2021 Silver Interim Report published last month forecasts industrial and photography demand to decline to 495 million oz (Moz) in 2020 versus 544 Moz last year. However, total silver physical and ETF investment demand is estimated to reach 587 Moz, the highest ever and the first time that it has surpassed industrial demand.
You will notice that the 10-year average annual industrial silver demand is 529 Moz compared to 261 Moz of total silver investment. Thus, over the past decade, industrial demand (including photography) has been twice that of total investment demand. That all changed this year as total silver investment demand is nearly 100 Moz more than industrial demand.
What happens next year if we see the same amount of total silver investment demand?? We could see huge moves in the silver price as I believe it will be hard for the Silver ETFs and Dealers to access another 600 Moz easily.
SRSrocco Report Forecast 2021-2025
Watch as Silver Investment demand begins to overwhelm the market as the Fed and central banks continue to print trillions of worthless fiat-digital currency as the debt skyrockets. At some point, the central banks will have to deal with SOLVENCY ISSUES, and you don’t want to be in most STOCKS and BONDS at that time.
Silver Eagle Sales Blow Past 30 Million In 2020
The U.S. Mint updated its figures for December reported 751,000 Silver Eagles were sold during the first seven days and 22,500 oz of Gold Eagles. This puts the total Silver Eagles for 2020 at 30,089,500 and Gold Eagles at 817,000 oz. Silver Eagle sales in 2020 are now double what they were last year at 14,863,500.
2020 Gold Eagle sales are 817,000 oz versus 152,000 oz during full-year 2019.
What’s amazing about the 2020 Silver Eagle sales? They are almost the same amount compared to full-year 2018 and 2019 combined.
If the U.S. Mint continues to sell 2020 Silver Eagles to the Authorized Dealers, we could easily see 31-31.5 million for the year. However, at some point, the U.S. Mint will begin to produce the new 2021 Silver Eagles and will no longer offer the 2020 coin. We will see.
With the ERA of CHEAP GOLD & SILVER gone forever, investors need to realize there aren’t that many assets that protect wealth. As I have stated repeatedly, most STOCKS, BONDS, and REAL ESTATE are Energy IOUs, while GOLD & SILVER are stores of Energy Equivalent Value.
Most investors may not understand that the precious metals are stores of energy equivalent value, but as the world heads over the ENERGY CLIFF, they will begin to get reacquainted… and quickly.
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Steve, silver is correlated to oil. What happens to oil price If silver reaches new highs?
spectator,
Actually, the oil price has been the driver of the silver price, not the other way around. I believe we will see much higher silver prices with oil prices remaining low.
steve
https://register.gotowebinar.com/register/2448054254471463439?source=nlus&utm_source=pv+magazine+USA&utm_campaign=6b4faacd62-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_80e0d17bb8-6b4faacd62-159614942
Solar Projects: insurance, thin panels,and hailstorms.
https://pv-magazine-usa.com/2020/12/08/solar-needs-aluminum-but-the-metal-has-a-carbon-problem/?utm_source=pv+magazine+USA&utm_campaign=6b4faacd62-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_80e0d17bb8-6b4faacd62-159614942
Good article!
This year there is a 300 mil deficit in silver. Do you know what is current silver inventory? ie for how much longer can we sustain a deficit?
also, it seems that so far the silver price has risen a roughly proportionate amount to the increase in silver demand. will demand need to rise further for price to rise sharply from current levels? Thanks a lot.
As a European who has worked at and with US institutions since the 1970s, I realized long ago that irony tends not to survive a journey west across the Atlantic. The key to Saxo Bank’s ‘Outrageous Predictions’ each December is the word ‘outrageous’. They are delivered with tongue firmly in cheek, and are intended to be a click-bait marketing vehicle rather than actionable insight. Ole Hansen, Saxo’s chief commodity analyst, is very far from “stupid”.