Climate Agenda and Consumer Spending Key Drivers of Silver Demand

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The pandemic lockdown of mines, factories and transportation caused a huge plunge in industrial demand in early 2021.

The lockdown also led investors to buy silver bullion coins in record amounts. The last two years have set new sales records for silver and gold bullion coins at both the Royal Mint and Perth Mint.

The use of silver in the manufacturing of consumer electronics, electric vehicles and solar panels has hit record highs.

The solar and electric vehicle industries are largely driven by billions of dollars of government funding and incentives. Even with the economy is a downward spiral it’s likely that subsidies and other funding for solar and green energy projects will continue. Green energy initiatives will continue to drive demand for silver for at least the next decade.

The President’s climate agenda has a goal that 50% of all new car sales by 2030 should electric vehicles.

Conservative estimates place 18 to 26 million new electric vehicles on the roads over the next seven years. With each having slightly more than one troy ounce of silver, that adds up to 20 to 30 million troy ounces or roughly 900 tons of silver needed.

A recent study from Australia believes that new solar panel manufacturing will deplete the world’s current silver stockpile by 2050.

Typical cell phone only small amounts of precious metals, roughly 1/35 gram of gold and a 0.34 gram of silver. Sales of smartphones are projected to reach 1.49 billion units by 2026, which will consume 50.155 tons of pure gold and a whopping 500 tons of silver.

The majority of silver that is pulled from the ground results as a byproduct from mining other metals. As domestic mining of related metals has remained steady over the last decade, domestic silver production typically averages roughly 1,082 tons per year.

Major automakers including Tesla and General Motors have announced large cash investments in mining.

Industry analysts from both industries are speculating this to be a huge strategic advantage given the push to reduce dependence on fossil fuels.

Technology from the Boring Company already exists that could easily be applied to upend operations in the mining industry.

Their latest tunnel boring machine, named PrufRock, is capable of digging a one mile long, 12 foot diameter tunnel about a week.

Applying this to existing mining operations and adopting new methods of mining precious metals could lead to drastically improved operating margins and reduction in fuel consumption in addition to significantly reducing the environmental damage and long term effects caused by the stripping overburden to reach paydirt.

Producing rare earth metals and minerals to meet the needs for EV batteries would be an excellent application of Boring Machine technology to the mining industry. Adapting the machines to dig and sort through deposits is also a way to help eliminate the harsh conditions faced by workers in cobalt mines throughout the world.

Despite record high inflation spot prices have stayed relatively low but volatile.

Consumer Drivers of Silver Demand

Solar panels manufacturing consumes roughly 10 grams of silver per square meter that generate around 200 watts.

Estimates from the Silver Institute show that each hybrid vehicle has 18-34 grams, while a full-electric battery vehicle has 25-50 grams.

Each iPhone has 0.034g of gold (Au), 0.34g of silver (Ag) and 0.015 of palladium (Pl).

Apple sold 240 million units in 2021, consuming:

  • 8 tons of gold,
  • 81.6 tons of silver
  • and 3.6 tons of palladium

2023 King Charles Britannia

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For nearly 1000 years, tradition in the United Kingdom dictates that a portrait of reigning monarch be incorporated into the obverse design of coinage.

The traditions of the British monarchy are part of the pomp and circumstance that many of their royal subjects have come to expect.

King Robert II of Scotland – Silver Penny

Following the death of Queen Elizabeth late in 2022, the designers and sculptures at the Royal Mint have been very busy preparing and producing new designs for all of the coins that they mint.

The official coronation of King Charles will occur in May. The Royal Mint is releasing new coin designs to celebrate this historic event and transition. The Type 2 design for the 2023 Britannia features a newly sculpted portrait of His Majesty King Charles III.

The Type 1 design featuring his mother, Queen Elizabeth are likely to start becoming scarce in the coming months. The new coins are already shipping from the mint.

Commonwealth countries will likely be following the lead and updating their coins with their own designs of the new ruler of the legacy British monarchy.

The new King Charles III 2023 Britannia Silver coin is also available in gold and platinum.

2023 Britannia Silver Coin - King Charles Obverse
2023 Britannia Silver Coin – Type 2 – King Charles III Obverse

This is a unique opportunity for investors.

There are many loyal fans of the Royal Family and many of obsessed Royalist fans will be adding many of these coins to their collections.

For 2023, the two designs of the Britannia bullion coins offers investors with opportunities for the lower mintage coins to become rare and over time will likely lead to higher premiums.

Speculative investors may do well when buying up the Queen Elizabeth 2023 Type 1 Britannia coin and holding them.

Premiums on the Type 1 Britannia are starting to rise as the limited number of coins available sells out. Many buyers are already scooping up the First Issue of the 2023 Type 2 Britannia that is adorned with a portrait of King Charles.

Royal Mint Reports Record Demand from American Investors

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In a press release last week the Royal Mint reported record demand in international sales for the final quarter of 2021.

Many stackers have been choosing to buy one-ounce Britannia coins since they are regularly one of the lowest priced sovereignly minted coins available.

Demand for silver Britannias increased 14% over the same quarter in the previous year. Sales of Britannia coins from US bullion dealers are up 96% year over year.

“Globally precious metals continue to experience a buying frenzy with retail buying increasing to record levels in markets such as Europe and the U.S., showing that the retail investor is concerned over the progress of the global economic recovery as the pandemic continues,” said Nick Bowkett, Head of Bullion Sales at The Royal Mint, in the press release. “We saw significant demand from international markets as investors looked to offset inflations risks by adding precious metals to their portfolio.”

Headlines and stories of escalating tensions in the Ukraine and trade issues with China are causing worry that the economic recovery may be stalling.

Demand for physical gold and silver has jumped in recent weeks as analysts are predicting that rising inflation pressures and growing economic uncertainty will lead to volatility in the stock and crypto markets.

The Royal Mint has been expanding the product lines available over the last two years. The US has seen the biggest growth in terms of precious metals sales.

Silver has seen a buying frenzy with investors looking for a safe haven due to the pandemic.

Physical silver coins are the ultimate store of value and are a safe have physical asset. Britannia 1 oz Silver Coins are IRA approved and are guaranteed by the Royal Mint.

Sealed Mint tubes and Monster Boxes are also available.