56.89 F
London
May 22, 2024
PI Global Investments
Precious Metals

AI Surge To Fuel Precious Metals Demand In 2024


The boom in AI could mean a boom in industrial demand for precious metals in 2024.

Metals Focus, an independent precious metals research consultancy, released a note recently that said it expects the increased demand for chips powering AI technology to drive “widespread support for a range of precious metals bearing components.”


Industrial and tech demand for precious metals has been muted this year due to sluggish global economic activity. For instance, the demand for gold in the tech and industrial sector was down 3% year-on-year in the third quarter with offtake in the electronics sector dropping by 4%.

Metals Focus said increased demand due to the evolution of AI could reverse this trend in the coming year, not just for gold, but also for silver, platinum, and palladium.

Expected upside from several applications that are gradually maturing should help support the recovery in industrial offtake next year.”

Metals Focus projects that shipping growth for AI servers and switches will rise by double digits over the next few years to keep up with the evolution of AI algorithms. This will stimulate precious metals demand.

Demand is expected to rise for “platinum alloys used in chip manufacturing, silver-palladium Ag-Pd multi-layer ceramic capacitors (MLCCs) in high power components, gold bonding wire in chip and memory packages, gold plating in printed circuit boards and palladium plating on lead frame.”

AI-driven demand will likely have the most significant impact on the silver market. Silver possesses the lowest electrical resistance among all metals at standard temperatures and is a vital component in many electronic applications. Tech and industrial applications account for more than half of global silver demand.

The silver market already faces the potential for significant supply constraints due to growing demand in the green energy sector. Silver demand was at record levels in 2022 and will likely run hot over the next several decades.

According to a research paper by scientists at the University of New South Wales, solar manufacturers will likely require over 20% of the current annual silver supply by 2027. And by 2050, solar panel production will use approximately 85-98% of current global silver reserves.

Industry/tech only represents about 7%  of global gold demand, but this still amounted to just over 75 tons of gold in the third quarter.

By SchiffGold.com via Zerohedge.com 

More Top Reads From Oilprice.com:



Source link

Related posts

Guanajuato Silver Company Ltd at OTC Markets Battery & Precious

D.William

CHAKANA COPPER to Present at the Battery & Precious Metals Virtual Investor Conference January 30th

D.William

Dundee Precious Metals Delivers Strong First Quarter Gold Production; Announces Timing of First Quarter Financial Results

D.William

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.