The Mennica Skarbowa has been observing the increased interest of Poles in silver purchases for several weeks. Customers are most likely to buy small, ounce-weight coins, i.e. the Australian Kangaroo, Vienna Philharmonic or Canadian Maple Leaf – a result of the strengthening silver price and the low unit price of the coin (about PLN 140). The coronavirus pandemic and the accompanying uncertainty in the markets, the subsequent geopolitical crisis and the inflation that has been going on for several months have made silver gain in value. The Mennica Skarbowa sees further potential for price increases in products of this bullion.
The precious metals market is highly correlated with the global economic situation. On a three-year basis, the price of silver rose from $12 (March 2020) to $22 (February 2023) per ounce – this is an increase of as much as 83%. Although the record silver price of 2011 ($48.5) is still a long way off, forecasts by The Silver Institute indicate that we may be facing a shortage of silver on the market this year, which will probably cause another increase in the price of silver. Precious metals have been one of the main winners of the recovery time from the pandemic economic crisis. In the second quarter of 2020 we observed the highest price of gold per ounce, exceeding $2,000 USD, while silver was then the most expensive in 7 years, costing $28 per ounce. Although it has been nearly 2 years since that time period, we can once again speak of “silver-gold times.”.
– Silver is a rare bullion, and its supply is limited, that’s why in case of subsequent increases in inflation, it will still retain its value. Increase in the value of bullions on stock exchanges, including silver and gold, mainly determines the weakening of the dollar, which is used as the international metal trading currency. Also, the withdrawal of the covid policy in China will drive the market, because silver products are extremely popular in that part of the world. Some analysts predict the potential for silver to rise to $25-30 an ounce by the end of this year. It seems that Poles also believe in it, because more and more customers are buying from us products made of this metal, especially low-weight coins. They are attractive to buyers, primarily because of the price (about 140 PLN), so everyone can afford such a purchase. What’s more, they are easy to monetize in the market anywhere in the world – notes Jarosław Żołędowski, President of the Management Board of the Mennica Skarbowa.
Silver is not only a valued investment bullion, but also a desirable metal in many economy sectors. Experts estimate that the industry, due to its unique physical properties, consumes about 40% of the world’s silver production. The largest producers of silver are: Mexico, Peru, China, Russia and Poland. Analyses by the Silver Institute and Metals Focus in November indicated that silver mining will increase globally by 1% y/y in 2022, reaching about 830 million tons by the end of 2022 – although we still have to wait for official data, it is already possible to determine in which sectors silver is most often used. For years, this bullion has been processed in jewelry, the electronics industry and medicine. Recently, it also had an important role in technological solutions, electric motorization, energy and photovoltaics. The increasing industrial demand for silver is causing its price on global markets to fluctuate in line with rising demand.
Investing in silver may be attractive to investors who are looking for a way to diversify their investment portfolio in 2023 and hedge against inflation. In case of buying silver it is worth to remember that since 2011 in Poland, a 23% VAT tax has been passed. Previously, this raw material, like gold, was exempt from value-added tax. Currently, according to the regulations, investment silver is not treated as currency, but as a so-called “collector’s item”.