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The Silver Institute Predicts The Largest Deficit In Decades For Silver

The Silver Institute Predicts The Largest Deficit In Decades For Silver
According to the Silver Institute on Thursday night, the world's demand for silver is anticipated to increase 16% this year to 1.21 billion ounces, resulting in the largest deficit in decades.
According to the institute, record levels were anticipated for the use of silver by industry, in jewelry and silverware, as well as in bars and coins for retail investors.
Although the sector only makes up about 5% of total demand, automakers are using more silver as the amount of electronics in vehicles rises. About 10% of the demand for silver comes from solar panels.
Due to buyers taking advantage of the low prices to replenish stockpiles depleted in 2020 and 2021, demand in India almost doubled in 2022.
Exchange traded funds (ETFs) that hold silver for investors declined, though, releasing metal back onto the market. The Silver Institute does not count ETFs as physical demand, however, as they merely store silver bars purchased at wholesale prices without processing them.
This year's deficit was predicted by the Silver Institute to be 194 million ounces, up from 48 million ounces in 2021.
According to Philip Newman of consultants Metals Focus, who created the figures for the Silver Institute, demand is likely to decline in the upcoming year.
"India's restocking is likely to trip over into 2023 but at some point will dissipate," he said. "By extension, you could see some decent figures in 2023 but it may not match 2022."
In the years to come, Newman predicted continued silver supply shortages but not to the extent of 2022 due to strong demand from sectors like the auto and solar panel industries.
Around 370 million ounces, or 25%, less silver was kept in vaults in London and New York under the watch of the COMEX exchange and the London Bullion Market Association this year.
But according to Newman, there was still plenty of silver. You still have sizable stocks, he remarked. "I don't believe that is a problem."
Due primarily to financial investors selling silver in response to rising U.S. bond yields and a strengthening dollar, silver prices have fallen by about 10% this year to $21 per ounce.

Christopher J. Mitchell

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