Silver has been the standout performer in the precious metals market in 2024, with a stunning 42.4% year-to-date (YTD) increase, significantly outpacing gold. According to the World Gold Council, this price surge is primarily driven by strong industrial demand, which now accounts for a remarkable 71% of silver’s total fabrication needs. As of October, silver prices have risen to approximately $31.37 per ounce, and analysts project that the metal could surpass $40 per ounce by the end of the year.
This surge highlights silver’s dual role in the market—not only as a safe-haven asset like gold but also as a critical industrial commodity. The increasing use of silver in renewable energy technologies, particularly solar panels, has fueled this rising demand. In fact, silver’s importance in the energy transition has cemented its place as a key material in the fight against climate change, adding significant upward pressure to its price.
Supply Deficits Continue to Drive Prices Higher
Over the past two years, silver has faced consecutive market deficits, with supply struggling to keep up with growing industrial and investment demand. According to the Silver Institute, the global silver market is expected to remain in deficit throughout 2024, exacerbated by ongoing supply constraints in major mining regions such as Mexico. These limitations, combined with the increasing need for silver in electrification technologies, are tightening the market further.
The supply-demand imbalance has kept silver prices on an upward trajectory, and market experts expect this trend to persist. The continued tightness in supply is largely due to the reduced output from major silver-producing countries, compounded by geopolitical challenges and declining ore grades in key mining areas.
Investment Opportunities Abound in Silver
The impressive price growth in silver has also opened up a range of investment opportunities. From silver-backed exchange-traded funds (ETFs) and physical bullion to investments in mining and streaming companies, silver offers diverse avenues for both short-term traders and long-term investors. According to Scotiabank analysts, silver’s dual role as an industrial metal and a precious metal makes it an attractive option for investors looking to diversify their portfolios.
As the renewable energy sector continues to expand, silver’s role in key technologies such as solar panels and electric vehicle batteries will likely increase, reinforcing its investment appeal. Moreover, shifts in global monetary policies favoring lower interest rates could further bolster silver’s safe-haven appeal, adding another layer of support for its price.
Looking Ahead: Factors Supporting Silver’s Growth
Looking forward, experts anticipate that silver will continue to outperform in 2025. Key factors expected to drive this growth include:
Global Monetary Policy: With many central banks likely to keep interest rates low, silver’s appeal as a non-yielding asset increases.
Renewable Energy Adoption: The growing shift toward renewable energy, particularly in solar power, will further boost demand for silver.
Ongoing Supply Deficits: Continued shortages in silver supply from major mining regions will keep upward pressure on prices.
Short-Term Price Outlook
Currently trading at $31.37, silver is maintaining bullish momentum, holding above its critical pivot point at $31.25. The next key resistance level is $31.55, and if silver manages to break above this, it could target $31.85 and $32.15. On the downside, immediate support is at $30.99, followed by further levels at $30.59 and $30.18, providing protection against any sharp corrections.
The 50-day exponential moving average (EMA) at $30.80 remains a key indicator supporting the ongoing bullish trend. The 200-day EMA at $31.52 could act as a resistance level, and a sustained move above the $31.25 pivot could strengthen the bullish outlook. However, any dip below this pivot level might trigger selling pressure, suggesting the importance of closely monitoring these levels in the short term.
In conclusion, silver’s impressive performance in 2024 is driven by a unique blend of factors, including strong industrial demand, tight supply conditions, and favorable macroeconomic trends. With continued support from renewable energy growth and supply constraints, silver is positioned for further gains, making it a key asset for investors looking to capitalize on both industrial expansion and precious metal stability.
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