Make Kitco Your Homepage

Outrageous: Green energy demand will 'turbocharge' silver price to $50 in 2021 - Saxo Bank

Kitco News

Kitco News has launched its 2021 Outlook, which offers the most comprehensive coverage of precious metals markets in the new year. Trillions of dollars were pumped into financial markets in 2020 and that won't come without consequences. Economists expect that investors will be Bracing For Inflation in 2021.

(Kitco News) -If 2020 has taught investors anything, it is to expect the unexpected. Looking ahead to the new year, one bank thinks that silver could be the metal with the next big surprise.

Earlier this month, Saxo Bank released its much-coveted annual Outrageous Prediction report. For commodity markets, silver made the list. In a headline-grabbing prediction, the bank sees silver prices pushing to the all-time highs around $50 next year.

Saxo Bank’s renewed focus on silver comes as prices continue to outperform gold heading into the new year. March silver futures last traded at $25.76, up 0.88% on the day. silver prices have more than doubled since its March lows when prices fell to $12 an ounce due to the COVID-19 induced market crisis. The question is: can the silver price double again in 2021?

Ole Hansen, head of commodity strategy at the Danish bank, said in a telephone interview with Kitco News that while he is bullish on silver for 2021, his forecast in the bank’s outlook is an extreme take on a significant trend that will drive silver prices higher.

Not only will silver’s monetary side will shine bright in 2021 in an environment where the U.S. dollar is driven lower by rising inflation pressure and low interest rates, but Hansen also said in his report that industrial demand and the green energy revolution will be an essential factor for silver.

“Turbocharging the rise in the silver price in 2021, even relative to gold, is the rapidly rising demand for silver in industrial applications, especially those driving the green transformation such as photovoltaic cells used in solar panel production,” he said in his report. “In fact, a real silver supply crunch is in 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.”

Hansen added that if investors want to see where silver is going, they should take a look at base metals like copper. The industrial metal continues to trade near an eight-year high as bullish sentiment grows in an environment of falling supply and increasing demand.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.