Silver Price In Question? Solar Demand & Economic Fears Create A Perfect Storm

I've been watching silver for some time now. In fact, as a fair disclosure, I should tell you that I have invested in, and still own, massive amounts of physical silver. Not to mention, I continue to grow my holdings of physical silver on a weekly basis... you know, when the price of the precious metal dips to a decent entry point. So, why am I so strung out on the precious metal? Well, to be honest, it has quite a bit to do with both the solar industry, and the global economy. Two very different topics, I know! Nonetheless, they are two very important topics when talking about the price of silver. Here's why...

The Solar Industry Will Keep Silver's Price Supported

One of the key reasons that I've maintained such a bullish opinion on silver is the solar industry. While it may seem like the precious metal and the solar industry are two completely different topics, you may be surprised at just how intertwined the two actually are.

When you buy solar panels, you don't really think about the components that make them work. However, one of these components is silver. In fact, silver is a key component in solar cells, and for good reason. The truth is that there is no other metal that can conduct heat and energy quite like silver. As a result, the precious metal is used in the construction of just about every solar panel on earth.

This makes things interesting when it comes to both the supply of and demand for silver. The truth is that governments around the globe are pushing toward solar power. In fact, both China and India are in the process of building massive solar power plants, and to do so, the countries will use literally thousands upon thousands of pounds of silver! However, it doesn't stop there.

In the United States, there are more new homes being equipped with solar panels than there are being equipped with natural gas systems. We're seeing the same types of trends in Europe and in other areas around the world. At the end of the day, demand for solar isn't localized in a single region, it's all around the world, and it takes a ton of silver to meet this demand. So, in a nutshell, the solar industry alone creates enough demand for silver to support current price levels.

Global Economic Fears

Another factor that's likely to send the price of silver upward is the global economy. The truth is that the global economy is incredibly concerning. With silver being a safe-haven commodity, investors tend to look to the precious metal to keep their money safe in times like these.

At the moment, the entire world seems to be focused on a vote that will be coming down the line on Thursday. This is when the British people will vote to decide if the UK will remain as part of the European Union. If the Brexit does happen, it could cause global economic devastation, leading to big gains in silver.

However, even if a Brexit doesn't happen, things still aren't looking good for the global economy. Europe has been struggling for some time. On top of that, China, Brazil, Japan, and many more have fallen on hard times this year. Unfortunately, even the United States is contributing to global economic fears as jobs growth in the country declines.

The Bottom Line

The bottom line here is that whether we are looking at the supply of or demand for silver, things are pointing toward growth in the price of the precious metal. With demand climbing due to global economic hardships as well as a boost in the solar industry, supply is having a hard time keeping up. That will lead to gains in the price of silver moving forward.

What Do You Think?

Where do you think silver is headed moving forward? Let us know your opinion in the comments below!

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