While gold has been dominating headlines with its recent price surge, experts are now turning their attention to silver, forecasting a potential high of $48 this year, a significant increase from its current price of $24.53. Global analysts predict that silver demand will reach 1.2 billion ounces in 2024, the second-highest level on record.
The Silver Institute attributes this bullish outlook to robust industrial end-uses, a recovery in jewelry and silverware demand, and various geopolitical factors influencing the market. Silver industrial fabrication is anticipated to achieve a 4% rise in 2024, reaching a record 690 million ounces.
Key growth drivers include the photovoltaics (PV) and automotive industries. The increased demand for silver in PV installations, particularly with the mass production of higher-efficiency N-type solar cells, is expected to contribute significantly. The automotive industry’s greater use of electronic components and investments in battery charging infrastructure will further support silver offtake.
Jewelry demand is projected to rise by 6% in 2024, with India playing a crucial role in driving this growth. The total global silver supply is also expected to reach an eight-year high of 1.02 billion ounces in 2024, a 3% increase. This growth is attributed to a recovery in mine output, with silver mine production projected to rise by 4% to 843 million ounces.
New production from key mines, including Newmont’s Peñasquito gold mine in Mexico, Polymetal’s Prognoz silver mine in Russia, Gold Fields’ Salares Norte gold mine in Chile, and the ramp-up of operations at Coeur’s Rochester expansion project in the US, will contribute to the increased supply.
On the recycling front, silver recycling is expected to slightly decline, dropping by 3% to a three-year low. Lower jewelry and silverware scrap supply are cited as the primary reasons for this decrease. Despite this, the silver market is forecasted to remain in a deficit in 2024, marking the fourth consecutive year of a structural market shortage, albeit with a 9% easing from 2023.
The geopolitical landscape, along with sustained industrial demand and recovery in various sectors, positions silver as a commodity to watch closely in the coming months.
