Gold and lithium have been all the rage in recent times for ASX investors.
However, there is another precious metal that’s an absolutely essential ingredient for many sectors, which is being ignored by the stock market.
“Silver, often overshadowed by its more illustrious cousin, is a precious metal that has quietly been the backbone of numerous industries for centuries,” MP Markets senior investment advisor Kai Chen said on the company blog.
“Its superior electrical and thermal conductivity properties have made it an indispensable resource in our modern world.”
Low supply, high demand
Unfortunately for the silver mining industry, the lack of funds has seen production fall into decline.
“The exploration and development of silver mines have been on a downward trend, leading to a precipitous drop in inventories and raising alarm bells about the future availability of this vital metal.”
But this doesn’t mean demand has waned.
In fact, “a new era” of silver usage is about to begin with the rapid take-up of electric cars and renewable energy infrastructure.
“Its crucial role in photovoltaic cells and electronic components has driven an unprecedented surge in demand,” said Chen.
“Yet, this escalating demand is being met with a supply chain that is riddled with challenges.”
Low supply and high demand. You know what this means.
Not just pretty around your neck
Chen feels more bullish about silver than gold because the former is actually used much more for industry as opposed to jewellery.
“Demand is expected to remain robust in the coming years, even amidst potential fluctuations in investment and jewellery categories,” said Chen.
“The reason? The global shift towards clean energy.”
The element has desirable qualities for the manufacture of solar panels.
“The demand from the solar market is expected to surge by 15% to 161.1 million ounces in 2023, almost tripling the demand seen in 2015.”
The best silver stocks to buy right now
So, right at the moment, which ASX shares would Chen buy to invest in silver?
The first is Silver Mines Ltd (ASX: SVL), which has seen its share price fall 5% so far this year.
“Silver Mines acquired the Bowdens Silver Project, the largest undeveloped silver deposit in Australia, alongside the neighbouring Barabolar Project, with a total of 2,007km of land holdings,” he said.
“A 2018 feasibility study indicated potential annual production of 3.4 million ounces of silver, 6,900 tons of zinc, and 5,100 tons of lead, supported by recent $18 million investments for further development.”
Chen’s other pick, Adriatic Metals PLC (ASX: ADT), has headed up 15.7% year to date.
“Adriatic Metals aims to begin production at the Vares Silver Project in Bosnia and Herzegovina by late 2023.”
“Additionally, Adriatic is constructing a processing facility for exporting silver, lead, and zinc materials, and owns the potential zinc-silver asset, the Raska Project, in Serbia.”
