Why is silver dropping in value?

However, demand for silver, especially the demand for jewelry among major consumers in India and China, declined as sales of jewelry in stores fell, due to the closure of several stores following the COVID-19 outbreaks. We recommend that you always do your own research and consider the latest news on Live Silver Price, market trends, technical and fundamental analysis, and expert opinion before making any investment decision. According to the Silver Institute, total global demand for silver is expected to increase by 15% this year to 1.030 million ounces. The increase in demand for silver in the solar photovoltaic energy sector could receive a boost in the coming years that could support the value of silver in the future. This means that silver faces a “severe obstacle” due to the global shift towards a stricter central bank policy, just like gold.

It could also increase silver requirements for the manufacture of photovoltaic (PV) panels, which are mainly imported from China, analysts at Heraeus Precious Metals said in their May evaluation. While the silver price forecast is affected by supply and demand, it is also heavily influenced by investors who buy precious metals as safe haven assets during times of economic or political uncertainty. In the long term, greater investment in silver exploration and development will be needed to maintain mining production. Jeffrey Christian, managing partner of the CPM Group, believes that while the prices of gold and silver may be suffering a short-term hit, investors with a longer-term market view may view this fall in prices as an opportunity.

However, it warns investors not to rush to the market yet, not least because the rise in 10-year Treasury bond yields has caused precious metals to fall, which could cause silver and gold prices to fall even lower. There were several trends that drove demand for silver, including strong demand for consumer electronics amid the transition to remote work, investment in 5G infrastructure and the increase in the use of silver in the green economy, especially in solar photovoltaic (PV) panels. Whether silver is the right investment for you depends on your risk tolerance, market outlook, and whether you expect it to rise or fall further, among other factors. Wright, from Wolfpack Capital, said that there is a “growing shortage” of silver and a potential “opportunity” for people interested in metals in the long term.

In fact, the year may also mean slower growth in industrial demand (with a forecast of 6 percent), jewelry (11 percent) and silverware (23 percent). “Currently, silver lacks a strong and popular narrative to attract new generalist investor dollars to the market,” says BullionVault's Ash. When considering silver price predictions, it's important to remember that high market volatility makes it difficult to obtain long-term estimates.