The Swiss investment bank UBS raised silver price forecasts by an amount of $5 to $8 per ounce and announced that it expects that in 2026 this metal will be quoted at a price $60 per ounce – Reuters reported on Friday.
The prices of the precious metal follow this information up by more than 4% on Friday, an ounce set a new historical record of $55.20. Over the last month, the price of silver has already increased by 9.5%. since the beginning of the year by 87 percent For comparison, gold, whose price increases were much more publicized due to purchases by central banks and the popularity of ETF funds, went up “only” 60% this year.
KGHM, the second largest silver producer in the world, which mines this metal together with copper ore, mainly in Poland, is happy with this turn of events. Moreover, the company also benefits from gold, produced together with copper in the USA, Canada and Chile.
According to the latest data, the KGHM Group produced 1,106.7 tons of silver from January to October, i.e. 0.7 percent. more year to year, the vast majority of which in Poland. At the current silver price ($55.20) and dollar exchange rate ($3.66) this amount is worth over PLN 8.7 billion. For comparison, at the end of 2024, the same was worth PLN 5.2 billion at the then exchange rate of silver ($29.24 per ounce) and dollar ($4.13). Copper ores mined in the USA, Canada and Chile have a higher gold content, and Polish ores allow the production of large amounts of silver in parallel with copper.
The company's shares increase by almost 3% on Friday, reaching as much as PLN 212.30thus approaching the historical record of 218.20 from May 2021.
Silver is the new bitcoin and new gold
Cryptocurrencies have recently been replaced by precious metals in the world with impressive increases. Silver generates higher percentage increases than gold. Historically, it has already increased by as much as 431%. between October 2008 and April 2011
“The current upward trend has intensified significantly since Donald Trump's return to office as US president, which has raised expectations for monetary easing but also increased the risk of loss of confidence in US assets such as Treasuries as his administration sought to gain greater control over the Federal Reserve,” Reuters comments.
Silver relies to some extent on the popularity of gold, however its lower value means that physical silver is more expensive to store, limiting its investment attractiveness. A more convincing argument for growth is the growing industrial demand for silver and limited opportunities to increase production.
Mostly silver for solar panels
According to data from the London Stock Exchange Group (LSEG), industrial demand will increase to 689.1 million ounces in 2024 from 644 million in the previous year. From this 243.7 million ounces will go to solar panelscompared to 191.8 million in the previous year and by 158 percent. more than 94.4 million in 2020
Global solar installed capacity growth was approximately 600 gigawatts (GW) in 2024 and is projected to grow to nearly 1,000 GW by 2030. The International Energy Agency predicts that 4,000 GW of new solar power capacity will be installed between 2024 and 2030.
This means that solar energy alone will generate an increase in demand for silver by nearly 150 million ounces per year by 2030, which would constitute an additional 13 percent. over physical demand in 2024 of 1.169 billion ounces, Reuters calculated.
The market deficit, calculated by LSEG, was 501.4 million ounces in 2024, a significant increase from 19.4 million in 2023.
