Record demand for physical silver is not enough for silver prices to rise this year because everyone is waiting for central banks' aggressive action to fight inflation.
This week, the Silver Institute released a report saying that physical silver demand is likely to reach a record high of 1.112 billion ounces this year. This is 8% more than in 2021.
In addition, demand will be expanded as the world develops towards green energy, where silver is being used.
According to Silver Institute's report, it is assumed that investment interest in gray metal will also be high this year. The demand for silver bars and coins is predicted to rise by 13% in 2022, a seven-year high.
At the same time, Perth Mint noted that over 2.3 million ounces of silver were sold in January. This is a record figure.
The US Mint said it sold 5 million ounces of this precious metal in January, the best start to the year since 2017.
But, even though steady demand is expected in the market, the prospects for prices remain subdued as the precious metal faces obstacles in the field of monetary policy.
Silver Institute said that silver prices will average about $24.80 per ounce, which is 1% lower compared to the 2021 average price of $25.14 per ounce.
Meanwhile, the German bank Commerzbank said that although the latest report of the Silver Institute provided investors with good news, this is not enough to support silver prices. The German bank believes that silver prices should decline due to gold, as the Fed intends to aggressively raise interest rates starting next month.
According to their report, silver prices are likely to be $ 24 per troy ounce by the end of the year against their previous forecast of $ 26. Commerzbank also revised down its 2023 forecast to $27.
