Silver Prices Drop Amid Supply Crunch, but AI Demand Could Drive Rebound
Investors are wondering whether it's time to buy silver after its price dropped significantly from its January peak. According to McKinsey, global data center spending could reach $7 trillion by 2030.
The demand for silver has been driven by the growth of AI data centers, which require large amounts of silver for various components such as server connections, thermal paste, and high-frequency connectors.
Despite rising demand, silver mining output has not kept pace with demand in recent years, resulting in a supply constraint. As a result, prices have fallen to around $58 per ounce from its peak of over $115 per ounce in January.
The iShares Silver Trust (SLV) and other silver producers such as First Majestic Silver (AG), Wheaton Precious Metals (WPM), and Pan American Silver (PAAS) have also seen their stock prices drop since June.