Feature article: Is silver the cheapest asset on the planet?
Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of uses. It’s not that well understood by investors and tends to get overshadowed by gold – but, perhaps, not for much longer.
We think that the provocative title of this article is justified by silver’s attractive fundamentals. The “official figures” from the Silver Institute estimate that the silver market has been in deficit for the past five years, and the deficit is increasing
Silver supply from mining is relatively inelastic, as new mines can take at least 10 years from discovery to commissioning. Identifiable above-ground stocks in London, the US and Shanghai, have been in sharp decline since 2020.
Photovoltaic demand for silver in solar panels exploded in 2023 and, in our opinion, is substantially underestimated in the official figures. Based on our analysis, the deficit for silver is bigger than the consensus believes
We expect that a shortage of silver will emerge going forward. In the meantime, the gold/silver ratio stands, currently, at 85x, making silver look cheap in a historical context. During the past century, it has been highly volatile in a range of 15x-20x during the peaks in gold/silver bull markets to more than 100x for short periods.
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02 May 2024
The Hardman & Co Monthly: May 2024
Volta Finance Limited (VTA:LON), 508 | Shield Therapeutics Plc (STX:LON), 2.0 | Real Estate Credit Investments Limited (RECI:LON), 123 | NB Private Equity Partners Limited Class A (NBPE:LON), 1,597 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,257 | H&T Group plc (HAT:LON), 374 | Duke Capital Limited (DUKE:LON), 30.8 | City of London Investment Group PLC (CLIG:LON), 370 | Chesnara Plc (CSN:LON), 250 | Arbuthnot Banking Group PLC (ARBB:LON), 985 | Apax Global Alpha Ltd. (APAX:LON), 154
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The Hardman & Co Monthly: May 2024
Volta Finance Limited (VTA:LON), 508 | Shield Therapeutics Plc (STX:LON), 2.0 | Real Estate Credit Investments Limited (RECI:LON), 123 | NB Private Equity Partners Limited Class A (NBPE:LON), 1,597 | ICG Enterprise Trust PLC GBP (ICGT:LON), 1,257 | H&T Group plc (HAT:LON), 374 | Duke Capital Limited (DUKE:LON), 30.8 | City of London Investment Group PLC (CLIG:LON), 370 | Chesnara Plc (CSN:LON), 250 | Arbuthnot Banking Group PLC (ARBB:LON), 985 | Apax Global Alpha Ltd. (APAX:LON), 154
- Published:
02 May 2024 -
Author:
Brian Moretta | Martin Hall | Mark Thomas | Paul Mylchreest -
Pages:
26 -
Feature article: Is silver the cheapest asset on the planet?
Silver is a precious metal, a monetary metal and an industrial metal with a surprisingly wide range of uses. It’s not that well understood by investors and tends to get overshadowed by gold – but, perhaps, not for much longer.
We think that the provocative title of this article is justified by silver’s attractive fundamentals. The “official figures” from the Silver Institute estimate that the silver market has been in deficit for the past five years, and the deficit is increasing
Silver supply from mining is relatively inelastic, as new mines can take at least 10 years from discovery to commissioning. Identifiable above-ground stocks in London, the US and Shanghai, have been in sharp decline since 2020.
Photovoltaic demand for silver in solar panels exploded in 2023 and, in our opinion, is substantially underestimated in the official figures. Based on our analysis, the deficit for silver is bigger than the consensus believes
We expect that a shortage of silver will emerge going forward. In the meantime, the gold/silver ratio stands, currently, at 85x, making silver look cheap in a historical context. During the past century, it has been highly volatile in a range of 15x-20x during the peaks in gold/silver bull markets to more than 100x for short periods.