Is 2021 the Year to Buy Gold or Silver? | The Mesh Report

Is 2021 the Year to Buy Gold or Silver?

The Gold Enthusiast January 5, 2021 Comments Off on Is 2021 the Year to Buy Gold or Silver?

Gold traded up as much as 2.8% early Monday morning at $1,948.70 an ounce, solidly above a $1,900 ceiling last visited in early November. The move higher has been attributed to investors’ concerns over the continuing pandemic and weak government efforts to control it.

In 2020, gold added about 25% to its price, or about $380 an ounce. While that was more than double the 11.5% improvement in platinum prices, it was just over half the 47.8% gain in silver prices.

A good deal of the run-up in silver prices came in December, when the price added about 20 points to its final tally for the year. With a year-end price of $26.44 per ounce, at least one heavily followed investment firm, Denmark’s Saxo Bank, forecast silver prices pushing toward an all-time high of around $50 per ounce in 2021.

The reasoning behind Saxo’s projection has nothing to do with pandemics or politics. The bank’s analysts see rising industrial demand for silver to meet green energy requirements as the driving force behind the expected increase in silver prices.

As we noted last month in a report on five ESG stocks to buy this year, the adoption of the European Green Deal, a European Union initiative that has the goal of making Europe climate neutral by 2050, is nearing a decision on a budget of $2.1 trillion through 2027, including a $920 billion pandemic-recovery package.

Silver is an important component of solar photovoltaic (PV) cells, the basic bits of solar panels. Both sides of a PV cell are coated with a conductive layer of silver paste. While cheaper metals like copper can be used in place of silver, the Silver Institute (not a disinterested observer) comments that non-silver PV cells “tend to be less reliable and have shorter lifespans.” That is likely to change, but not until the end of the decade, according to CRU International, which conducted the demand study for the Silver Institute.

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