According to the Silver Institute's annual World Silver Survey investor demand remains relatively flat. However, silver Investors should expect to see a more nuanced market in 2022 as industrial demand is expected to remain strong.

The research for this year's report was completed by Metals Focus. Phillip Newman, a founding partner at the British precious metals research firm, said that the challenging forces would dominate the silver market during the year.

According to Newman, investors continue to invest in silver amid the tense geopolitical situation and at the same time try to protect themselves from the growing inflation threat. Meanwhile, looking at silver's industrial side, the precious metal faces consistent demand as the global green energy transition moves forward. However, the growing threat of stagflation and a potential recession could push demand further out.

Putting everything together, Metals Focus predicts that silver prices will peak at $28 an ounce in the first half of the year. Newman expects prices to average $23.90 an ounce for the year, down 5% from the 2021 average price.

While investment demand for silver faces some challenges, Newman said that the precious metal's industrial demand will remain solid through the end of 2022.

Metals Focus predicts a 5% increase in global silver demand due to continued progress in industrial production, which is expected to achieve another record high in 2022.

In 2021, silver demand exceeded 1 billion ounces. This could be a new trend in the silver market as countries look to produce more green energy through solar power. Slower growth could impact some industrial demand; however, the green transition is a trend that will not go away.

Along with solid demand, the silver market is on the cusp of a new trend where it could face long-term supply shortage.