EDITOR NOTE: A “turbo-charged version of gold”--that’s how Jeff Currie, Goldman Sachs’ head of commodities, describes silver. Why “turbocharged”? Because silver plays a key role in the production of solar panels, making it a beneficiary of green energy spending. We’ve always known that silver has the advantage of being both a monetary and industrial metal and that its price would have benefitted under either condition of economic boom and bust had it not been for years of artificial price suppression. But with the green energy agenda coloring the horizon of fiscal spending on a global scale, silver is poised for a long and sustained bull market. For investors who want to “own” the metal versus speculate on its price with a paper substitute, we recommend investing in non-CUSIP silver coins or bars, storing them safely in a private depository of choice.
Silver as a key component in solar panels makes it a better investment than gold for investors who are interested in the metals market, Goldman Sachs’ commodities chief Jeffrey Currie told CNBC on Thursday.
Currie laid out his case in an interview on “Fast Money: Halftime Report,” and it didn’t have anything to do with the recent reports of an attempted silver short squeeze possibly sparked by Reddit users.
“I like to say that it’s a turbo-charged version of gold,” said Currie, global head of commodities research at Goldman Sachs, adding that silver could benefit from more green energy spending down the line.
Both gold and silver can offer protection for investors who are worried about currency debasement, Currie said. Those concerns have taken on greater saliency in the last year as the coronavirus pandemic prompted major injections of fiscal stimulus, as well as highly accommodative monetary policy from world central banks, including the Federal Reserve in the U.S.
“What silver has that gold doesn’t have: It goes into solar panels,” Currie said. Silver is used in solar cells given its strength as a cost effective conductor of heat and electricity.
That’s relevant because climate advocates have called on governments around the world to include green investments in their coronavirus pandemic-related spending efforts.
In December, Inger Andersen, executive director of the U.N. Environment Programme, told CNBC the Covid stimulus packages represented “a once-in-a-generation opportunity to kickstart a green recovery.”
In the U.S., in particular, President Joe Biden frequently discusses the need for investment in renewable energy as part of a transition away from fossil fuels. While he’s already rolled out a $1.9 trillion Covid relief bill, Biden has been expected to release another proposal geared toward infrastructure spending and climate change mitigation.
That would be favorable to Currie’s thesis that silver is a better precious metal investment than gold right now. With silver, he said, “you get that added boost that a lot of that spending ... is going to be green [capital expenditures]. That green capex goes into solar panels and then silver is the biggest benefactor.”
The iShares Silver Trust, an ETF retail investors can buy that tries to track the price of silver, was down more than 2% Thursday to around $24.30. The ETF has risen nearly 48% in the past year.
Silver futures for March delivery fell about 2% to around $26 per ounce. Similarly, the price of silver was up more than 46% in the past 12 months.
Originally posted on CNBC