Giant banks like Bank of America and Goldman Sachs say that silver could double to $50 per ounce if Joe Biden wins next week’s presidential election, primarily due to enactments of some elements of the New Green Deal, which could double silver’s industrial demand for solar panels and other applications.
“Investors help, but industrial demand ultimately moves the needle” for silver prices, wrote a team of Bank of America strategists led by Michael Widmer last August. Annual silver demand, now about 2,285 metric tons, could increase by 87% to 4,272 tons over the next 15 years based on de-carbonization of the U.S. sector alone, according to the BofA strategists, who believe this new demand could “push silver into a sustained deficit,” which last occurred from 2006 to 2011, pushing silver up to $48.58 in April 2011.
Bank of America strategists think Biden’s “green stimulus” could push silver to $35 an ounce in 2021 and then take off on its third run up to the $50 region (after 1980 and 2011) within the “medium term.” This would represent a remarkable percentage gain from the latest near-term price floor of $10.80 last March.
Goldman Sachs agreed with this prognosis on October 12, when Goldman analyst Mikhail Sprogis said silver will be an “obvious beneficiary” of a Biden victory due to his energy bias tilting toward renewable energy, and solar in particular. Solar investment accounts for 18% of silver industrial demand and 10% of silver’s total demand, he added. Goldman Sachs declared that they had just bought silver at $24 per ounce due to “a few potential upward solar surprises in the coming months.” Those expected “upward solar surprises” would include both the U.S. and China stepping up plans for more solar installations.
Goldman’s best-case scenario is that global solar installations would increase by 50% between 2019 and 2023, but they could grow even faster under Democratic presidential nominee Joe Biden’s plan to install 500 million solar panels in the U.S. in the next five years. Meanwhile, China could boost its installations by 40% in its new 5-year plan. Sprogis also said that silver is a buy due to its precious metal role.
Trump could still win, but the pollsters and pundits tell us we should prepare for a Biden victory. If so, we should prepare for a new reality by investing in the three metals of freedom, perhaps in this order – silver, gold and lead, since sales of guns and ammunition are also booming in advance of a probable Biden win.