In the movie, “I Feel Pretty” (2018) – the dowdy Amy Schumer character has a brain injury and wakes up astonished to discover that she is stunningly beautiful.
Silver may be experiencing a similar disorienting sensation.
Three months ago, silver couldn’t get a date on tinder.
Now it is an object of mass desire.
This is confirmed by the 3-month share price performance of Endeavor Silver (EXK.NYSE), Silvercorp (SVM.T), Fortuna Silver (FSM.NYSE), First Majestic Silver (AG.NYSE) and Impact Silver (IPT.V).
September Comex silver is trading at $23, up 6% today on safe-haven and industrial demand, and “green energy” stimulus.
Silver is used as conductive layer in solar panels.
“More than $50 billion of green stimulus has been approved by governments thus far this year,” states BMO Capital Markets. 75% of this has come from in Europe. “The recent Biden campaign Clean Energy plan, most notably a zero-carbon power grid by 2035 would see new wind and solar capacity built to displace thermal generation.”
“Silver’s potential exposure to green stimulus is now an important tool in its armory, and should we see the same velocity of ETF flows evidenced in recent months continue through Q3, 2020.” continued BMO.
The green sector consumed 105 million ounces of silver last year, as solar gained market share from fossil fuels.
Impact Silver (IPT.V) – the biggest gainer in the above chart – is an example of a small silver miner well positioned to gain from these macro tailwinds.
During the mine site visit, CFO Jerry Huang spoke about the investment opportunity at IPT.
Some of the details about the purchasing agreement with Samsung may have changed, but the big story [the investment opportunity] has not changed.
As Mr. Huang states, silver has many industrial uses which account for more than 50% of annual world-wide demand.
Industrial applications use silver’s conductivity (the highest of any element for electricity and heat) as well as its sensitivity to light and anti-bacterial qualities.
In 2020, silver is used in brazing alloys, batteries, dentistry, glass coatings, LED chips, medicine, nuclear reactors, photography, solar energy, semiconductors, touch screens, water purification etc.
The countries that consumer the most silver are the US, Canada, China, India, Japan, South Korea, Germany and Russia.
“It seems the precious metal [silver] has been caught up in the perfect storm,” stated Jeroen Blokland, senior portfolio manager at Robeco Asset Management.
“Much of what’s driving silver also is driving gold – aggressive monetary policy financing of fiscal spending, which limits the ability of bond yields to rise,” states Market Watch, “That is sending inflation-adjusted, or real, yields lower, which tends to boost precious metals”.
The long-neglected metal is suddenly very popular.