Is silver rare? Silver is now considered rarer than gold in some places. As rarity increases, the price for silver is rising in 2021—but it may not continue in years to come. Got silver? Now may be the time to part ways with it while prices are high—or at least see how much it’s worth. Let’s dive into why silver is scarce and what this means for the near future.
Increased Demand
While silver and gold are both precious metals, they have a lot of distinct differences. One large difference is that almost all the gold ever mined by mankind is still here. Gold is used more for monetary purposes, as a store of wealth, or for jewelry. Silver, on the other hand, is used in a wide range of different industries. The natural antibiotic properties of silver make it a great instrument in the medical field. Other uses include:
- Military applications
- Many kinds of electrical switches
- Batteries
- Relays
- Water purification systems
- Paints
- Major component in the photographic industry
For more uses of silver, check out our blog on real-world applications of silver. Silver, much like gold, has also been used as a monetary instrument for many centuries. In addition, India and China are continuing their unparalleled advances in the industrialized world, which will only further the scarcity of silver.
Constraints in Supply
If silver is scarce, why don’t we just mine more silver? We cannot simply mine more silver because of the cost to do so. For example, to mine gold, it costs a few hundred dollars to mine and refine one ounce of the yellow metal. Gold trading is around $1775 an ounce, making that a profitable endeavor. Silver, on the other hand, is primarily mined as a by-product. Mining silver as a primary metal would cost around the same as mining one ounce of gold. With silver trading around $26 an ounce at the time of writing, it would be nowhere near profitable to mine it as a primary metal.
Currently, we mine about 600 million ounces of silver each year. All the while, industry consumes about 870 million ounces. As a disparity develops, the market tightens.
Peak Silver and Surging Prices
Silver supply from mining has peaked once again. What’s different this time is that the market won’t be able to balance itself with government sales or scrap as it has before. The annual deficit has not become a full-blown crisis, but it may not be long before headlines begin inciting panic over shrinking supply.
The Future of Silver
Will the silver supply continue to fall? Will the demand for silver increase? And what does all of this mean for silver prices today?
A popular forecasting website, the Economy Forecast Agency, suggests that the price of silver will inch higher throughout 2021, currently at $25.83 per ounce. However, looking far ahead, predictions show the metal falling below the $20 mark again in 2024.
So, What Should you do About it?
With predictions showing an increase in the worth of silver in the near future and a decrease by 2024, now is a great time to assess the worth of your silver and to potentially get more for it than you’ll be able to for years.
Need help assessing the worth of your old silver? The experts at Gold Guys are happy to help. Give us a call, send us an email, or stop into one of our Gold Guys locations. We look forward to serving you!