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Silver Price Outlook: Silver prices are witnessing a steady rise. Silver futures prices are currently around Rs 83,000 per kg. Industrial use of silver has reached an all-time high. This has created a shortage of supply as compared to demand, due to which prices are rising. Silver is used in electric vehicles, solar panels and medical devices. The use of silver is also increasing with the increasing focus on EVs and solar. Silver is a very good electric conductor. It neither gets damaged nor shorted, hence it is used. There is no other good alternative to it. According to Anuj Gupta, Commodity Head, HDFC Securities, there is a shortage in the global supply of silver. This is the fifth consecutive year when the supply of silver is less than the demand. In the year 2024, there is a shortage of 7,513 tonnes of silver as compared to the demand. In such a situation, experts estimate that by the end of this year, the prices can go up to Rs 90,000 per kg. Let us know what are the reasons due to which the prices of silver may increase in the coming days.
Industrial use of silver is increasing
In the year 2023, the demand for silver in solar panels, electronics, electric vehicles etc. increased by 11 per cent to 20,353 tonnes. Industrial demand for silver is also increasing in the year 2024.
The use of silver will double in solar panels
At present, there is a focus on solar energy all over the world including India. The use of silver in solar panels is increasing rapidly. The use of silver in solar panels is expected to double by the year 2025.
Use of silver in electric vehicles
Countries around the world, including India, are giving priority to electric vehicles. Due to this, the consumption of silver in EVs is increasing rapidly. Due to this, the demand for silver in EVs is expected to reach 5,250 tonnes by the year 2025.
Increasing demand for silver jewellery
The demand for silver jewellery is increasing rapidly. The demand for silver jewellery was 5,655 tonnes in the year 2023. The trend is the same this year as well.
Central bank purchases
Given geopolitical tensions like the Israel-Hamas and Russia-Ukraine war, central banks around the world are increasing the purchase of gold and silver.
Prices will increase when interest rates decrease
There are strong chances of a reduction in the key interest rate in the US Fed Reserve meeting to be held in mid-September. Interest rates will be cut in the US for the first time since 2008. This will boost silver consumption.
Where will the prices reach
According to Ajay Kedia, director of Kedia Advisory, silver did not sell well in the last 10-12 years, so the cost of mines increased and production decreased. Now there is a shortage of supply due to increased industrial use. According to him, the price of silver can reach Rs 1.25 lakh to Rs 1.5 lakh per kg in the next 1 year.
