Silver is gaining new attention. But according to many analysts, the metal is heavily oversold.
Nevertheless, the report released by Metals Focus on Wednesday indicated that they remain bullish on silver as industrial demand, which accounts for about 50% of the silver market, continues to pick up. They said it will provide significant support to prices.
In addition, the gold / silver ratio remains sky-high despite failing to reach yearly highs. The closing price during the US session was 75.76 points, which means that 75 ounces of silver is equal to the value of one ounce of gold.
One reason why silver continues to receive increased attention is the recovery in the global manufacturing sector. Projects on solar power also boosted demand as silver is an essential component of photovoltaic (PV) solar panels. Metals Focus said there are currently 18 countries installing at least 1 GW of new PV capacity, up from 11 in 2018.
Another important sector to watch out for is the microchip sector, which faced significant supply constraints following the recession brought by the COVID-19 pandemic. However, this sector is seeing a rise in production capacity as companies seek to increase their inventories.
In general, Metals Focus said investors should not expect a decline in silver as industrial demand will continue to grow.