Silver prices to be sustained by shrinking supply, higher demand
The drop-off in base metal investment is going to propel silver higher, said Silver Wheaton CEO Randy Smallwood who spoke to Kitco on Wednesday.
A poor base metal market has dampened supply.
"There's decreasing supply from the mining side, mainly because silver mostly comes from lead and zinc, and the pricing has not been very strong as of late," said Smallwood. "We spend a lot of time studying the base metal sector, because that's where we get most of our precious metal streams."
During the past six months, spot zinc has stayed below US$1 per pound, but recently the metal has started to gain some momentum.
"So we see shrinking supply combined with increasing demand, and that's always the perfect recipe for strength in commodity prices. Silver, which always lags gold, has definitely taken a run."
Silver is up. <a href="https://www.kitco.com/news/2020-07-16/Gold-silver-see-corrections-in-solid-price-uptrends.html">During the past week silver prices overnight did poke to another 11-month high and are closing in on $20, a technical resistance level</a>.
Outside of people looking to silver as a precious metal for investment, Smallwood touts the industrial uses of silver.
"We continue to see strong growth on the industrial side. Silver is being consumed in high technology applications. And on top of that, it's got the strongest antibacterial benefits," said Smallwood.
He also noted the need for silver in mobile electronics, solar panel manufacturing and water purification systems.