Silver is currently testing a resistance area, with the potential for a surge that could trigger a rally. The previous week marked the completion of a third evaluation of support in the vicinity of the $21.93 price range.
Silver, often considered the more volatile cousin of gold, and it has been making headlines recently. The metal is testing a resistance zone, aiming for a breakout that could lead to higher prices. Last week completed a third test of support around the $21.93 price zone. This surge comes amidst a backdrop of increasing demand for silver in various industries, particularly in the renewable energy sector.
The ‘solar is the 800-pound gorilla’ of silver demand. This increased demand is a testament to silver’s versatility and its growing importance in the green energy sector. As the world moves towards more sustainable energy sources, the demand for silver, a key component in solar panels, is expected to rise.
The solar energy industry has significant implications on the silver market due to the following reasons:
- High Demand: Silver is used in photovoltaic (PV) technology, which is a key component of solar panels. The global transition to green energy has increased the demand for silver.
- Supply Risks: The current rate of reduction in silver consumption is not sufficient to avoid increasing silver demand from the PV industry. This could pose price and supply risks.
- Need for Alternatives: There is a need for solar cell and module makers to reduce or eliminate the use of silver in their products. This is due to the fact that based on expected PV growth, solar manufacturers would require at least 85% of global silver reserves.
- Research and Development: Increased investment is needed in research and development of “silver-lean” PV technologies. Recent achievements with copper plating are seen as particularly promising.
- Recycling: Over the longer term, the recycling of older solar modules could provide a significant source of silver. However, further investment and research is needed here.
However, it’s not all smooth sailing for the silver industry. The session on Monday saw silver somewhat negative. It is worth noting that the session was President’s Day in the US, and this will have had a significant influence on liquidity overall. Despite these fluctuations, silver continues to see buyers on dips, indicating a strong market sentiment for the metal.
In addition to the market dynamics, significant discoveries are also shaping the landscape of the silver markets. For instance, Kefi Gold and Copper $KEFI unveiled a significant discovery in Saudi Arabia’s Hawiah district. This marks the third copper-gold-zinc-silver deposit found in the area by its joint venture Gold & Minerals (GMCO, KSA). Such discoveries are not only a boon for the companies involved but also have the potential to influence the global supply of these precious metals.
In United States, hard rock minerals like gold, silver, copper, and lithium on public lands belong to the American public, but under a 150-year-old law, the US gives them away for free. This has sparked debates about the need for reform in the mining laws and the potential impact on the precious metals market.
In today’s world, the silver market is no exception to the rule of constant change. It finds itself at the mercy of a multitude of influences, ranging from the ebb and flow of market dynamics to groundbreaking discoveries and legislative developments.
When the stakes are high, knowledge holds a value that can rival that of silver itself. It’s a precious commodity, a tool for navigation, and a beacon in the complex world of the silver market.
