Silver futures for July 2021 delivery closed at $28.04 an ounce on Jun 14. This shows a 5% gain so far this year. Notably, this marked the highest level since August 2008 on data of the ongoing economic recovery and low base effects due to the pandemic.
Silver prices have averaged around $26.60 per ounce since the start of 2021. According to the Silver Institute, silver prices will average around $27.30 this year, registering an impressive 33% year-over-year increase. Analysts expect silver prices to reach $32 later in the year.
Silver’s performance is driven by demand and supply imbalance. The precious metal is benefiting from a heightened safe haven demand, varied industrial use and growing focus on silver-consuming green energy applications. The Silver Institute projects silver demand to grow 15% this year. A part of this increase will be driven by investment demand, which is expected to go up 26% to 252.8 million ounces (Moz).
The summer months will mark a pivotal point in the silver and gold markets as a federal judge will decide the sentences for two Deutsche Bank traders convicted of spoofing in the precious metals markets. The decision will set a precedent for the traders awaiting trial over the coming months.
Industrial and investment silver demand is rising in 2021. Interest in alternative energy is a driving force behind increasing silver demand as it is a critical ingredient in solar panels. Additionally, shortages of copper and other base metals could weigh on silver supplies over the coming years.
The trend in silver turned higher at the March 2020 low. Despite silver’s consolidation, the trend remains bullish, making higher lows and higher highs since the March 2020 bottom.
Subsequently, the mining stocks of some silver miners are receiving a Buy rating for the potential returns. Some of the best silver stocks to buy this week include:
Fresnillo plc FNLPF: The Mexico-based company explores for silver, gold, lead, and zinc concentrates. Its flagship project is Fresnillo silver mine in the state of Zacatecas.
Hecla Mining Company HL: This Coeur d'Alene, ID-based company discovers, acquires, develops, and produces precious and base metal properties in the United States and internationally.
Alexco Resource Corp. AXU: The Canadian silver miner operates the majority of the historic Keno Hill Silver District, in Canada's Yukon Territory — one of the highest-grade silver deposits in the world. The company is currently advancing Keno Hill to production and started concentrate production and shipments in the first quarter of 2021, expecting to produce an average of approximately 4.4 million ounces of silver per year contained in high quality lead/silver and zinc concentrates at an average all-in sustaining cost of $11.59 per ounce. Keno Hill has significant potential to grow and Alexco Resource has a long history of expanding the operation's mineral resources through successful exploration.