When there’s news related to India, it will always be truly interesting. This time there’s an uncanny connection between the silver sector’s boom and the fluctuations in the silver price.
In the latest news, there has been a solar shift in the market and India could silently be becoming the next major PV(photovoltaic) player.
India is on the bandwagon and fast-tracking towards becoming a significant player in the global solar industry and having significant changes in the photovoltaic PV markets. In addition to this solar cell and module exports have been experiencing rapid growth which has been complemented by strategic efforts that will bolster domestic manufacturing in solar PV components.
As per several projections, India is poised to achieve self-sufficient solar modules by the year 2026. This is a significant development as it marks a pivotal milestone that could potentially transform it into a major player in the global PV export market.
Has the Country’s ‘Atma Nirbhar’ Bid paid off in the Solar Sector?
According to a Wood Mackenzie report, India is poised to emerge as the second-largest producer of solar modules by the year 2025. The development comes at the right time as with China’s monopoly slowing down in all respects, India is breaking it further down.
While China has an 80 per cent global share in the solar module supply chain and India is taking on the titan and in its initial stages the reports are looking expertly gently promising because of the efforts.
In addition to this spearheading effort, India is poised to have a direct link and cater to the US demand that has been rising in the previous years. The US accounts for nearly 93 per cent of India’s solar PV exports.
When it comes to India, the country’s capacity to manufacture solar modules is rising at a rapid pace and it’s being complimented by a simultaneous reduction in the imports of such modules from China.
So with all this in plain sight, what’s the relation between Solar’s boom in India and the silver demand that has been created for quite some time?
Let’s get into discussing that!!
Is the Silver Price propelling solar development?
The rise in solar was something that all of us had foreseen for quite a long time and in our solar and silver article we talked about a few points why silver is driving the demand for solar as well. So let’s dive into that.
Technological Advancements:
The advancement in technology is further bolstering silver’s demand and the exception conductivity and reflectivity making it indispensable in high-tech applications such as electronic, medical devices and automobile components. However one of the most important development would be in solar panels.
The silver demand and concern for solar panels also exist in this sphere. Previously, the solar panel technology used was known as “Passivated emitter and read contact (PERC) cells but this outdated technology is on the verge of being replaced by 2 new efficient technologies known as tunnel oxide passivated contact (TOPCon) and heterojunction structures(HJT).
Looking at the big picture 10 milligrams of silver per watt is used in PEC cells, almost 13 milligrams are used in TOPCon cells and almost 22 milligrams per watt is used in the HJT, hence this could be a reason for the rise of solar energy in India.
Government Initiatives:
Focusing now on solar production in India which could be a catalyst for Silver’s production, the government of India has a crucial role to play in this.
In recent years, the government of India took a series of measures to boost not just the share of solar power generated in the country’s energy basket, but they had radically increased India’s share in global solar manufacturing.
The Centre endeavoured to impose a 40 per cent basic customs duty on solar modules and 25 per cent on solar cells.
The perfect solar storm is brewing in India and silver has a big role to play. As a result, we can see the trajectory moving on a positive note. So without further adieu, let’s dive into the technical analysis, shall we?
Silver Prices and Solar Sector – The Technical Outlook:
With all this in play let’s see what our analysts at Commodity Samachar and our Head of Research at Commodity Samachar say about this unique phenomenon.
” Whenever we talk about silver’s trajectory it’s mandatory to compare the same to gold as well.
Firstly gold is more bullish nowadays as compared to Silver and the mentality of Indians is a factor mostly for investing or purchasing Gold and silver in the festive session. “
So question raised is
” Why is silver low in volatility and which is better for future investment?”
Ankit Kapoor said
” The silver price is now trading around 73000 in the MCX and $23 in the Comex market. As we’ve witnessed in the Corona period (2020) silver had traded at around $11.
There is a very low chance that silver price will go down to zero in the future but as per our analysis, the said silver is poised to cross $100 in the upcoming days. “
Will Siver Perform Better in the Future?
Due to some reasons including solar panel production, silver is going to be a trump card in your arsenal. Here’s why!!
Production Cost:
nowadays for producing Silver, the raw cost is an average of $11-$13. After all processing, there is a real value of silver around $21-$23.
Industrial Demand:
Solar Panels:
Using silver as conductive ink, photovoltaic cells transform sunlight into electricity. These cells are combined to form solar panels. The use of silver in the fabrication of photovoltaic cells, also known as solar cells, is seen as an area of rapid growth in the short to medium term. Solar Power Europe expects that global solar power installations will more than double in just three years to reach 2.3 terawatts by 2025, up from only 1 terawatts in 2022.
Automotive Industry:
Every electrical action in a modern car is activated with silver-coated contacts. Basic functions such as starting the engine, opening power windows, adjusting power seats and closing power trunks are all activated using a silver membrane switch. Battery electric vehicles contain between 25 and 50 grams of silver, while hybrid vehicles use 18 to 34 grams of silver. That’s compared to 15 to 28 grams of silver in a light internal combustion engine vehicle.
Brazing and soldering:
Adding silver to the process of soldering or brazing helps produce smooth, leak-tight and corrosion-resistant joints when combining metal parts. In addition, silver-brazing alloys are used widely in everything from air conditioning and refrigeration to electric power distribution.
Jewellery:
While silver and gold possess similar working qualities, the white metal enjoys greater reflectivity and can achieve a brilliant polish. A vast amount of silver supply from mine production gets turned into a form of jewellery.
Future Outlook of Silver Price:
| Year | Silver high |
| 1980 | $49.45 |
| 2011 | $48.70 |
There is an assumption that silver is 10x times as present on the earth as compared to gold. As we have compared it with gold and silver prices are near around 6 lakhs per Kg.
The Silver price fails to cross the $50 level 2 times, if silver crosses the $50 level then we will see the boom in silver and their new levels at $70-$100.
As I always say, Charts are never wrong and they show that the future silver price of this is a good time to invest in silver at this price of $23-$21 and in MCX 71500 – 68000.
In the above-mentioned chart, silver fell around 78.6% from 2011. In 2014–2020 silver traded in the range and created a rounding bottom pattern. Silver gives the 30% upside move in the coronavirus period. Then once again silver trade in range from 2020.
Now, Silver has created a Cup & handle pattern in the below-mentioned chart and it shows a bullish trend in the upcoming days in the market. Currently, silver is traded in a certain range. We may expect a bounce after December 2023 in silver if silver gives a weekly closing near $26. Then we will see the next targets are $35–$38–$44. Above $26 we will see a breakout in the cup & handle pattern. There is a good time to enter around $23–$21 in silver. We may expect 2X returns in silver in the next 3 to 5 years.
Finally, we have to keep in mind the gold and silver ratio. The Middle East is the biggest reason for jump in the gold as compared to silver. Dollar and gold is the safest commodity for investment and it is the easiest way to transact worldwide. The gold/Silver ratio will be troublesome for a few days in that range. We may expect the gold/silver ratio gives bounce back from the 90-92 resistance zone. When the gold/silver ratio breaks from 90- 92 then we may expect targets of 70-55.
The difference between gold and silver is currently around 10000 to 12000, but shortly the difference may increase to 40000 to 45000, a similar situation occurred in the years 1980 & 2011.
Commodity Samachar
Learn and Trade with Ease
Also Read: Silver and Solar – A Relationship that’s exceeding demand and expectations, Silver Trading | Will Silver Outshine Gold This Diwali?
Recommended Read: Going ‘All In’ for ‘Made in India’: What’s the Buzz Among American Consumers ?
Want help on your trades?