Given that silver’s primary use is industrial, it becomes clear that in the long term, it is worth focusing on the macroeconomics of industrial production in the United States and China, at the very least.
According to the latest data, US industrial production climbed 0.4% MoM in August after rising 0.8% in July. Capacity utilization currently stands at just over 76%, which is not very high.
In China, industrial production in July – again based on the most recent data – increased by 5.3% YoY. On average, an increase in the range of 5.5-6.5% is expected for full-year 2021.
Incidentally, silver is widely used when soldering contact conductor material. Therefore, as soon as the global semiconductor market returns to normal output levels and removes the supply deficit, silver prices will head north due to stable demand in this area as well.
Furthermore, as global economies recover, the demand for raw materials will stabilize and increase. This also applies to silver. For this reason, our year-end target for silver prices is $26-26, $25-28.50 for the first half of 2022, and $30.00 in the long term.