In 2022, precious metals like silver continue to engage the interest of market watchers and investors. In the year 2020, the performance of the silver was exceptionally well because this metal managed to outperform the gold by 51%. The demand of the precious white metal was driven due to heavy demand and its image of safe haven interest. Even in the first half of 2021, silver prices managed to receive a huge boost owing to squeezing by retail investors. The recent acceleration in industrial activities has also managed to boost the demand for silver. All of us know that silver is deemed attractive as it offers a hedge against inflation.
The industrial output is also an instrumental factor that affects the demand. Now, the effect of the pandemic has somewhat vanished and the industrial activities have already geared up. The investors know that factors like inflation are likely to add more weight to the silver price in 2022. However, some experts and researchers continue to assert that investor sentiment is likely to be the determining factor. If the inflation maintains at the same level, more and more investors will switch to silver considering its inflation hedge. The steps of the giant banks such as adjusting the interests also influence the price of the precious metals. Factors such as inflation push the cost of extraction. The silver mines produce a vast quality of by-product metals such as zinc and lead. So, silver mining always generates considerable revenue. In the near future, the use of state-of-the art mining technology will help to speed up the production of silver.
The performance of silver is likely to shine in the 2022
The silver demand is rising exponentially because this white metal is required in industrial activities. Discovering new mines and starting receiving supply from those mines is a time-consuming procedure. Silver is a precious natural resource, and speeding up the production process is technically infeasible. Many experts are expecting that the silver price is likely to go up by 2% in 2022. It is likely to touch the figure of US $25.75 according to some reports. The market is watching, and the silver prices are also benefiting from positive spillovers. The gold prices were also improving in early 2022 and silver benefited.
The cost of the silver is likely to go up due to minor fluctuations in the stock market. Some silver producing countries have become concerned that their mines will deplete without generating adequate revenue. In 2022, silver is likely to shine due to the following factors:
- Investor risk sentiment
- Supply chain
- Inflation
- Geopolitics
- Performance of the US dollar