In 2024, gold’s ascent to record highs and silver’s relative underperformance have driven the silver-gold ratio higher. However, according to Nasdaq, in early April 2024, investors eye a potential breakout, as silver may surge past $30, attracting trend-following purchasers after years of consolidation.
In this article, we will discuss the 2024 prediction for silver and whether it will outperform gold.
Silver could hit $100 per ounce
Keith Neumeyer, CEO of First Majestic Silver, has consistently projected a bullish outlook for silver, envisioning its price soaring to unprecedented levels of US$100 per ounce. Despite initial bold projections, such as suggesting a potential for silver to reach US$1,000 alongside surging gold prices, Neumeyer has maintained focus on the US$100 mark. Recent reaffirmations of this target, including discussions at industry events, highlight his unwavering belief in silver’s enduring value.
Key market indicators, including the US Treasury yield curve and the US Dollar Index, will impact the appreciation in silver prices, followed by the market anticipation of Fed rate cuts in 2024.
Silver’s supply deficit to be bigger in 2024 compared to 2023
The silver supply deficit for 2024 is projected to exceed 2023 due to insufficient silver production. It is also argued that deducting net investments in silver exchange-traded products exposes the market’s deficit.
Estimating mining production to increase by around 4% (at 843 Moz) and consumption to be between 1.2 to 1.4 billion ounces, it is attributed that a demand surge of technological advancements like electric vehicles, solar panels, and wind turbines are all reliant on silver. Hence, there is a prediction of a substantial supply shortfall.
Silver hits two-year high, leading to Fed rate cut expectations
Silver reached a two-year peak, driven by remarks from two Federal Reserve officials indicating expectations of three rate cuts in 2024. Gold surged above $2,288 per ounce in April, maintaining stability afterward, while silver surpassed $26 per ounce. Federal Reserve Presidents Mary Daly of San Francisco and Loretta Mester of Cleveland, both wielding voting power in policy decisions this year, expressed the likelihood of three rate reductions throughout 2024. However, they emphasized a lack of immediate urgency.
Silver on 3rd April 2024 reached $26.49 per ounce, marking its highest intraday level since March 2022, with an expectation that the metal prices would keep increasing and outperform gold’s trajectory.
As per CNBC, silver is to touch its 10-year high
Silver prices could soar to their highest level in a decade, according to CNBC reports. The Silver Institute forecasts global silver demand to hit 1.2 billion ounces in 2024, driven primarily by robust industrial usage. Due to strong demand, silver prices are anticipated to reach $30 per ounce, which was last seen in February 2013.
A 9% surge in silverware demand and 6% rise in jewelry demand is projected. However, short-term challenges such as a slowdown in the Chinese economy and reduced likelihood of US interest rate cuts could hinder silver’s institutional investment. Nevertheless, market analysts expect a turnaround in the second half of 2024, aligning with potential Federal Reserve rate cuts, which historically boost precious metal prices.
Silver spot prices to rapidly climb
Market analysis indicates a potential rapid climb in silver spot prices, contrasting with gold’s consecutive closures above $2200.
The Silver Institute notes ongoing deficits in the silver market, with supply constraints exacerbated by mining strikes in key producing countries and reductions in major exchange inventories.
Analysts anticipate silver will follow gold’s lead, potentially outperforming it as global economic uncertainties escalate. At the close of 2023, the spot silver price experienced a minor decline, ending just below $24.02 per ounce for the week. Conversely, the spot gold-silver ratio increased, reflecting gold’s dominance over silver, reaching a year-end ratio of 86. This projects a further climb for spot silver rates in the current year.
Top silver-producing countries to see a dent in supply, raising prices further
Mexico, one of the top silver producing countries to face multi-year lows in supply. Despite facing challenges, silver spot prices surged by 20% in Q4 2023-2024, nearly reaching 2023 highs before retracing to $23. This retracement followed a decline in gold prices after reaching record highs on December 4, 2023.
The stronger-than-expected jobs report dampened hopes for Federal Reserve rate cuts in Q1 2024. Silver prices have remained supported at around $25.80 per ounce (with a 5.4% increase in 2024) but struggled to rally due to limited miner output and increasing demand for green technologies. Analysts anticipate that the growing demand for electric vehicles (EVs) and solar panels in 2024 and a potential industrial demand rebound will further bolster silver prices.
Comex silver trend to be bullish
COMEX (the Commodity Exchange Inc.) Silver settled 3.41% higher at $25.804, with all prices based on the settlement price of the current front month contract. Analysts also believe that silver could be poised for a significant rally while gold has surged ahead. In the first week of April 2024, gold reached another record high of $2,261.00 per troy ounce, marking a nearly 10% increase since January’s start due to robust central bank demand and anticipated interest rate cuts.
Since historically, gold and silver prices have exhibited a strong correlation, the gold/silver ratio has averaged around 70x in the last 20 years. However, the recent surge in gold prices has left silver lagging.
XAU to continue record high, post easter
XAU/USD prices surge amidst Middle East tensions, awaiting the Fed’s decision. Meanwhile, silver traded at $23.1255, encountering resistance at $23.27637 in January 2024, sustaining a bearish trajectory. Silver is still currently valued at $25.65, with a 0.34% decline since 2nd April 2024.
Despite a slight price decline, there is a chance for the prices to pivot post Easter with a sudden surge in silver demand.
Silver’s bullish outlook is certain for 2024
While uncertainty looms over whether silver will outpace gold, analysts agree on a probable price rally in 2024. The silver-gold dynamic remains complex, but the year holds promise for a surge in silver prices, driven by various factors and expert forecasts.
Bullish projections and optimistic forecasts may suggest a promising year ahead for silver, but it’s essential to acknowledge the complexities and uncertainties in the market. Factors such as supply deficits, industrial demand, geopolitical tensions, and monetary policy decisions all contribute to the nuanced landscape of silver trading. While some indicators point towards a potential surge in silver prices, others highlight potential obstacles, such as economic slowdowns and geopolitical tensions. Therefore, navigating the silver market requires a thorough understanding of these factors and a cautious approach. As we move forward into 2024, investors must remain vigilant and adaptable to capitalize on opportunities while mitigating risks in the ever-evolving silver market.
Disclaimer: All material published on our website is intended for informational purposes only and should not be considered personal advice or recommendation. As margin FX/CFDs are highly leveraged products, your gains and losses are magnified, and you could lose substantially more than your initial deposit. Investing in margin FX/CFDs does not give you any entitlements or rights to the underlying assets (e.g. the right to receive dividend payments). 𝖢𝖥𝖣𝗌 𝖼𝖺𝗋𝗋𝗒 𝖺 𝗁𝗂𝗀𝗁 𝗋𝗂𝗌𝗄 𝗈𝖿 𝗂𝗇𝗏𝖾𝗌𝗍𝗆𝖾𝗇𝗍 𝗅𝗈𝗌𝗌.
Forecasts and predictions about future performance are inherently uncertain and speculative in nature. While every effort has been made to provide accurate and reliable information, there is no guarantee that the events or outcomes discussed will occur as forecasted. Past performance is not indicative of future results.
About The Author
Ritika Tiwari
Ritika is a Financial Markets Journalist with over 10yrs experience in observing and reporting on events impacting the markets. With her analytical mindset, she aspires to help traders by simplifying complex financial concepts into articulate and actionable insights.
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