Industrial Demand for Silver - My Thoughts
- •Been seeing a lot of chatter lately about industrial demand and how it's supposedly propping up silver prices.
- •But are they *driving* the price, or just providing a baseline demand that prevents it from completely cratering when investment demand wanes?
- •I tend to lean towards the latter.
Been seeing a lot of chatter lately about industrial demand and how it's supposedly propping up silver prices. As someone with a good chunk of my portfolio in physical metals, (and by good chunk, I mean a very good chunk – think easily high six, pushing seven figures across various custodians), this is something I keep a close eye on. My experience, after 30+ years in the market and a decade retired down here in Palm Beach, tells me there's more to the story than just "solar panels need silver, so price goes up."
Sure, the EV and solar industries are sucking up significant amounts of silver, no doubt. But are they driving the price, or just providing a baseline demand that prevents it from completely cratering when investment demand wanes? I tend to lean towards the latter. When I look back at some of silver's biggest moves, they've almost always been tied more to monetary policy, inflation fears, or major geopolitical instability, rather than a quarterly earnings report from some tech company. It feels like the industrial narrative gets pushed hard when the investment case for silver is a bit weaker, almost as a way to reassure investors.
What are your thoughts on this? Am I being too cynical, or does anyone else feel like the industrial demand argument is a tad overplayed by some of the financial media? I’m always running numbers when I consider new allocations, and I even play around with that Gold IRA Calculator sometimes to visualize potential growth scenarios, especially for the gold portion. But silver's industrial component feels like a different beast. Do you think the current levels of industrial consumption are sustainable at higher prices, or will we see substitution become a bigger factor?