Purchase of the Aberdeen Standard Physical Silver Shares ETF (SIJustification of the investment:
1. The growth of industrial demand for silver
Industrial use accounts for a significant share of global silver consumption — about 50-55%. The main application is electronics, electrical engineering, solar panels. The demand for silver, as a key component of these technologies, continues to grow with the development of renewable energy sources and electric vehicles (EV), which makes the metal an important resource in the coming years. Silver consumption in the automotive industry is expected to reach 90-100 million ounces by 2025, supporting long-term growth in demand for the metal. In particular, silver-zinc and lithium-silver technologies in batteries play an important role, providing a long-term potential for increasing demand in the electric vehicle industry.
2. Limited supply and scarcity
Against the background of growing demand, there is stagnation in silver mining. Global silver production in 2023 amounted to about 830 million ounces with consumption of 1.3 billion ounces, indicating a significant supply shortage. In the future, this difference may increase further due to depletion of mines and limited commissioning of new capacities. This situation creates prerequisites for a long-term increase in the price of silver.
3. Projected price growth
The price of silver is expected to rise to $35 per ounce in the coming months, with a possible correction to $30. In the future, the level of $ 50 per ounce may be reached in 1-3 years, which was a historical maximum in 2011. This growth is supported by both industrial demand and investment interest in the metal, especially in the context of inflationary expectations and instability in financial markets.
Instrument Selection:
The selection of the Aberdeen Standard Physical Silver Shares (SIVR) ETF is based on its predominantly low management fee compared to the similar iShares Silver Trust (SLV) ETF. At the same time, the SIVR fund also tracks the value of physical silver, which makes it more attractive to long-term investors looking for exposure to silver with minimal costs.
Possible risks:
- Fluctuations in energy prices can affect the cost of silver production. Silver mining is energy intensive, and any significant change in energy prices can lead to increased costs for producers.
- Dependence on industrial demand: Lower demand in key industries such as solar panels or electric vehicles could slow the rise in silver prices.
- Macroeconomic risks: the price of silver is influenced by general economic conditions, including fluctuations in the US dollar and global economic crises.
Conclusion:
The purchase of the Aberdeen Standard Physical Silver Shares (SIVR) ETF represents an attractive opportunity for investors seeking long-term exposure to silver at minimal cost. The projected growth in demand for the metal, limited supply and favorable market conditions create positive expectations for the price of silver in the medium term.
