Guardian Vaults business development manager John Feeney revealed in a report published last week that despite silver struggling to perform at the moment, the metal should attract new investors in the near future as it became clear that the Fed wouldn’t tighten monetary policies given the lower-than-expected employment figures released in August.
Currently, the metal is going for about $24 per ounce. Normalizing interest rates or shifting monetary policy would have negative consequences on the economy, which is why the Federal Reserve will not be taking any action on this.
International monetary policies support precious metals, which include silver, whose industrial demand is steadily growing day by day. PV solar power has been a key pillar in the demand for the grey metal, with Feeney noting that the electric car market represents an important growth sector for silver.
In the report, the business development manager stated that silver should be seen as a metal for the future as its industrial applications grow with increase in the use of electric vehicles and greater renewable energy adoption. Feeney explained that the grey metal’s monetary history was evident even today, with investors flocking to the metal as a safe haven during unpredictable times, which greatly benefited the metal’s price. He noted that despite this, the main driver for silver’s future demand was in the new growth sector of electric cars and its different industrial applications.
He added that the metal’s use in electric vehicles was projected to increase to more than 89 million ounces by the year 2025 based on data from the World Silver Institute. Its demand is also expected to increase by more than 100,000 ounces by the year 2030. This, Feeney noted, was a huge deal, given that the metal’s supply outlook remained stable, which meant that a decent deficit in the silver market would be observed in the near future as electric car adoption became widespread.
Feeney advised investors to focus on the grey metal’s long-term bullish fundamentals, instead of its short-term volatility. He explained that sharp drops in the price of the metal should be viewed as opportunities, as the price itself didn’t signal a change in the metal’s long-term fundamentals. He also noted that silver was a unique metal that wouldn’t be easy to replace by an alternative, as electrical efficiency was the main objective, adding that investors should be confident in the long-term tailwinds that would benefit the metal’s market as they were probably much stronger than those for gold.
As the demand for silver picks up as a result of its use in the electric vehicle industry, mining companies such as Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are likely to deliver greater shareholder value.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
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