2020 Silver Inflows Nearly Triple Compared to 2019

Author: Jon Clarke - Bullion & Economics Editor

Published: 16 Oct 2020

Last Updated: 19 Oct 2020

Synopsis

The first three quarters of 2020 have seen huge inflows into silver-backed Exchange Traded Products (ETPs), dwarfing a comparable period in the previous year. 

Silver Holdings Strong Through 2020

A press release by the US based Silver Institute, reported that silver ETP holdings increased by 297 million ounces through the third quarter of 2020 compared to 103 million ounces in 2019. ETP holdings dipped slightly in September to 1.026 billion ounces from August’s 1.052 billion ounces but is set to rise again in October, sitting at 1.045 billion ounces as of 12th October. The Silver Institute say these results reflect silver’s “safe haven” role but also point out that some investors are expecting silver to outperform gold.

Not All Silver Linings

The COVID pandemic has had a huge effect on the jewellery market, particularly in the Indian and East Asian region as global demand is expected to fall by around 20% for the year.

Weaker car sales, and other silver-using sectors have seen slowdowns in production, whereas areas such as solar have been more robust are expecting to deliver on their commitments.

Our Take

We pointed out last week that silver was being overlooked and pointed out to its 6-month performance compared to other precious metals.  The results from the Silver Institute seem to support our view, and suggest that a coming gold rally could encourage further silver purchases, pushing silver into the $30 (£23.25) threshold.

The continuing fiscal measures and monetary policies may see a further bolstering of precious metals in the coming months.

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