Silver demand is on pace to hit record levels in 2022, driven by new highs for physical investment, industrial demand, jewelry, and silverware production, according to the Silver Institute’s Interim Silver Market Review.
Global silver demand is projected to reach a new high of 1.21 billion ounces in 2022. That would be a 16% increase from 2021.
Institutional demand for silver has faced headwinds due to rising interest rates with Federal Reserve’s inflation fight. This has led to a decrease in silver ETF holdings. But demand for physical silver has been robust. Physical investment demand is on pace to jump by 18% to 329 million ounces this year. According to the Silver Institute, “Support has come from investor fears of high inflation, the Russia-Ukraine war, recessionary concerns, mistrust in government, and buying on price dips. The rise was boosted further by a (near-doubling) of Indian demand, a recovery from a slump last year, with investors often taking advantage of lower rupee prices.”
We’ve seen signs of this high demand in the rapidly decreasing levels of silver in COMEX vaults.