While other metals have surged in price, silver has lagged in comparison. However, Permanent Portfolio Family of Funds portfolio manager and president Michael Cuggino speculates that the metal’s price may go higher in the near future given that last year, silver futures rose by more than 45%.
Cuggino adds that a possible drop in the U.S. dollar, a lack of capacity investment over the past few years and perceived or real inflation as the international economy rebounds, may also contribute to the metal’s price moves.
Earlier this year, silver was going for $30 per ounce after a Reddit post online that proposed a short squeeze on the metal was circulated. In late May, the metal was going for roughly $27, which is more than a 5% increase in price.
Noble Gold CEO and founder Collin Plume states that copper is viewed as an industrial metal and silver as a metal for jewelry. However, he notes that the latter metal is the best conductor of energy and adds that silver will be a key material in energy. Plume also explains that the price of silver may surpass $50 if the Biden administration’s plan for renewable energy gets approved, which will prompt an increase in the demand for silver and a shortage in supply.
According to FactSet, silver prices were at an all-time high in 1980 when they hit $48.
Direxion’s managing director Ed Egilinksy, who is also the head of alternatives, stated that silver has uses in both electric vehicles and solar panels, and will play an important role in the shift to 5G wireless network technology. This, he says, will increase the metal’s price and boost its demand as well. Presently, however, the metal lags behind the gains of other industrial commodities, with both gold and silver underperforming.
Economic geologist Brent Cook states that silver and gold are underperforming as most individuals are focused on cryptocurrencies. However, Plume asserts that investors aren’t likely to choose crypto over gold, as cryptocurrencies are risky investments. Meanwhile, copper recorded a high of nearly $5 in May, indicating an increase of about 30% in this year so far.
Cook notes that the demand for base metals will remain strong with prices steadily increasing, despite authorities in China warning companies that drive up commodity prices of serious repercussions.
On the other hand, Plume maintains that this move in China may prompt a shift to markets that require metals for industrial uses, which will allow silver and gold prices to rise. The likely rise in the price of silver and other precious metals as depicted by this report is likely to encourage companies such as Asia Broadband Inc. (OTC: AABB) to press ahead with their development work so that more resources can be extracted.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
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