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| Money Metals News Alert | August 19th, 2024 – Gold and silver prices rallied last week. Gold closed at a new all-time high of $2,518, while silver ended its two week sell-off and finished back above $29/oz. Silver gained more than 6%, while gold rose 3.6%.
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Stocks also rallied after the recent bout of selling. The S&P 500 gained nearly 200 points for the week.
Yields on the 10-year Treasury were modestly lower, and the U.S. dollar declined against other major currencies.
Fed Chair Jerome Powell will speak Friday at the close of the Fed's annual conference in Jackson Hole, Wyoming.
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The odds highly favor a rate cut in September. Powell's remarks on Friday should provide more foreshadowing of what the Fed may do next month.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 86.2 to 1 | | |
| Will Electric Vehicles Be the Killer App for Silver? | | | |
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Industrial demand for silver has been surging in recent years. Solar panel manufacturers were largely behind the 11% jump in demand for 2023 versus the prior year. Forecasters predict another 9% jump this year.
For silver investors, however, the future of demand from manufacturers may be even brighter than the recent past.
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The solar industry has been behind much of the growing appetite for silver.
Demand in this sector was relatively stable at around 2,800 metric tons per year for several years. But it began rising sharply in 2022. The expected demand from solar in 2024 is 7,216 metric tons, while total industrial demand is forecast at 22,111 metric tons.
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All told, photovoltaic panels will drive nearly one third of all industrial demand, according to the Silver Institute.
The growth in demand is exciting for silver investors. And it should be worrying for manufacturers who need the white metal as a component in a wide array of applications.
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A shortage appears to be developing, and it may already be impacting the market. Prices for silver recently rose past $30/oz for the first time in more than a decade.
While solar panels have been a "killer app" for silver, a different application just emerged with the potential to use even more of the metal.
Last week, Samsung announced that it has developed a solid-state battery with silver as a core component.
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It represents a massive leap forward in making electric vehicles more viable.
Samsung's battery promises to provide a 600-mile range, a reduction in charge time to just 9 minutes, lighter weight, roughly double the life-span, and lower risk of fire.
The improvement in charge time is itself, a game changer. Current batteries can take 7-13 hours to charge fully and will get only about half of that 600-mile range.
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It is estimated that each 100kWh capacity battery, which is the size expected for many consumer model electric vehicles, will use a kilogram of silver.
Should electric vehicles incorporate this technology and reach 20% of the total global automobile production, they would require 16,000 metric tons of silver annually.
That level of demand is no pipe dream.
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Just one application could increase total industrial demand by 72% versus the current level. And solid-state technology likely has other applications – battery storage for solar power systems and wind farms for example.
One thing is for certain: the current silver ecosystem is not ready.
Given the current deficit in supply versus demand, it isn't even ready for the growth in solar panel manufacturing. Much higher prices will be needed to make more marginal silver deposits viable for production. | | |
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| Potential Market-Moving News This Week | |
- Monday, August 19th – U.S. Leading Economic Indicators. The LEIs are expected to dip back into negative territory. They turned briefly positive last month at 0.2%. The forecast for this week's report on July is -0.4%.
- Thursday, August 22nd – Existing Home Sales. Existing home sales are expected to come in at a 3.95 million unit annual rate, a slight improvement based on 3.89 million reported in June.
- Friday, August 23rd – Jerome Powell Speech at Jackson Hole. Powell and the FOMC have held off on rate cuts much longer than many of us anticipated. But cracks are finally starting to emerge in the economy, leading many to believe the central bank will have to reverse course by September.
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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