U.S. Stocks Finish Higher; Dow Jones Industrial Average Up 0.55%
September 1, 2024Silver Prices Fall to Two-Week Low Amidst Dollar Strength and Reduced Trading Activity
September 3, 2024Silver prices (XAG/USD) are facing challenges in recovering as they hover near $28.40, with a low of $28.33 reached during the day. These struggles are primarily due to worries about decreased industrial demand stemming from indications of a slowing Chinese economy. In August, China’s Manufacturing Purchasing Managers’ Index (PMI) dropped to 49.1, down from 49.5 in July and lower than the anticipated 49.5. This decline signals a contraction in China’s manufacturing sector, adding additional downward pressure on silver, a crucial industrial metal. Potential exists for a rise in silver prices driven by a potential surge in demand for Samsung’s groundbreaking solid-state batteries. These advanced batteries, set to transform the electric vehicle (EV) industry, require substantial quantities of silver. Each battery could use up to 1 kilogram of silver, and if just a fifth of vehicles adopt this technology, there could be a 16,000 metric ton increase in global silver demand. This anticipated demand surge may push silver prices up, providing an upside for investors. Opportunities for investment are also arising through silver exchange-traded funds (ETFs) like the iShares Silver Trust (SLV) and the Physical Silver Shares ETF (SIVR). SLV, managed by BlackRock, holds assets worth $13.57 billion and has seen a 23% increase year-to-date. It remains a favored option among investors with an expense ratio of 0.50%. On the other hand, SIVR, overseen by abrdn PLC, has shown a year-to-date growth of 22.8%, offering a lower expense ratio of 0.30%, albeit with less trading volume compared to SLV. Despite the potential boost from Samsung’s batteries, the challenges in China’s economy continue to weigh on silver prices. The country’s manufacturing PMI indicates a contraction, pointing to reduced industrial activity and a consequent decline in silver demand. In conclusion, although China’s economic slowdown is causing downward pressure on silver, the expected demand surge from Samsung’s silver-based batteries could provide a much-needed lift, making silver an asset worth monitoring closely in the upcoming months.