Today, silver remains a reliable investment medium in the form of bullion, coins, exchange-traded products, and silver futures, alongside other precious metals like gold and platinum. It is also widely used in jewelry, industrial applications, and electronics. Like many commodities, supply and demand as well as speculation drives the price of silver.
Historically, silver prices have been particularly volatile when compared to gold. This is due to a smaller market, fluctuations between industrial and value storage applications, and lower market liquidity.
In some cases, these factors may cause inconsistent market valuations, making speculation challenging. This article explores the projected silver price movements and what you can expect from the market in 2024.
Factors Influencing the Price of Silver in 2024
This year, silver’s year to date rise continues to outpace gold, with the price of the precious metal rising to a two-year high at the beginning of Q2. The current price of silver is $26 per ounce, significantly up from the 2023 lows of $19.
According to a survey conducted by The Silver Institute, the rally is driven by three major factors. These include an increase in industrial demand for silver, global geopolitics, and forecasts of pending U.S. interest rate cuts. The findings of the survey are supported by leading financial market analysts.
Supply and Demand Dynamics
The global demand for silver exceeded its supply significantly last year. Experts predict that this deficit will extend into 2024. The trajectory continues a four year long trend of consecutive supply shortfall.
According to the Silver Institute Industry Association, a 2% growth in demand for silver is expected to increase the global deficit by 17% in 2024. Increase in industrial applications, current push towards green technology, and reduced mining are the primary contributors.
Silver has experienced increased industrial use in jewelry and other general-use items like silver flatware. The metal is also highly valued in the electronics and chemical industries. A surge in solar applications has also placed pressure on silver supply since metal is an essential component in the production of photovoltaic panels.
Solar installations have seen widespread adoption worldwide in recent years. Silver usage per panel has also increased as it improves the efficiency of the solar cells. As such, the solar industry’s share of the global silver supply has nearly tripled over the past decade.
The continuing rise of electric vehicles (EVs) is also influencing the silver market. As demand for these vehicles soars, so does the need for silver, adding to its fifth consecutive annual supply deficit. Estimates by the Silver Institute show that the average silver loadings for battery EVs are between 25-50g per vehicle.
This is compared to approximately 15-28 grams per vehicle for diesel and petrol cars. In addition, the numerous charging stations rolled out globally to support the switch to electric also require silver. Overall, the outlook for silver demand within the industrial, solar, and automotive sectors appears healthy for 2024.
Geopolitics
Geopolitics is another crucial factor to consider, with the Ukraine-Russia and Israel-Palestine wars still ongoing. There is also the latest Israel and Iran conflict at play. These conflicts are major sources of uncertainty, which often pushes investors away from risky assets like equities, real estate, and cryptocurrencies toward stable assets like precious metals.
Last year after Israel declared war on Hamas, gold and silver prices rose sharply in the ensuing weeks as investors rushed to the perceived safer investments. 2024 is shaping up to be an eventful year for global geopolitics, especially in the Middle East and Asia.
This is not to mention the elections set to take place in more than 50 countries this year. The circumstances surrounding and outcomes of these elections could have global implications on policies and security. The expected ripple effects of these events could influence the price of silver significantly.
The reallocation of investor capital due to safe-haven jumps may cause the value of silver and other precious to appreciate. Market players are currently watching out for the economic and geopolitical impacts of these developments, a state that has traditionally led to precious metals increasing in value.
Expected U.S. Interest Rate Cuts
The Federal Reserve anticipates that the U.S. Central Bank will make the three rate cuts in 2024 that will improve the prognosis for silver and other precious metals. The first cut is expected mid-year if inflation continues to fall. FX Empire noted that lower interest rates positively influence the prices of commodities by making non-yielding assets more attractive to investors.
The ensuring decline in yields should encourage investment in precious metals. The subsequent sharp rally following statements by officials indicates market confidence considering the awaited rate reductions.
These developments showcase investor faith in precious metals as a safe investment medium in uncertain economic environments. While there is still no urgency, such monetary policy decisions are expected to increase silver prices further this year.
What It Can Mean For You
Overall, increased industrial use, green economy demands, and investor interest in the metal could push the price of silver up in 2024 and beyond. Market predictions from financial experts and commenters range from moderate to strongly bullish, with some expecting silver prices to hit an all-time high this year.
The disparity between predictions is a reminder of the difficulty of providing long-term price estimates. Still, silver seems to have a generally positive outlook considering the factors detailed above and other market indicators.
With forecasts looking promising, investing in the precious metal can be a profitable venture for you. It might just be the best time to get the most value from those pieces of silver jewelry, coins, or bullion. Also, with the value of silver expected to increase, you may be looking to make a purchase now for prospects.
If you are looking to buy and sell silver, it’s critical to enlist the services of a reputable and trusted store or a certified dealer. A professional establishment can buy and sell gold and silver coins or jewelry in a transparent, risk-free, and secure environment.
You will also get a fair deal that considers the current market prices. You also benefit from coin appraisals as well. For instance, a silver appraisal can help with quality assurance, proof of ownership, valuation, and insurance coverage. These aspects will be crucial in informing your investment decisions.
Doylestown Gold Exchange checks all these boxes and more. We specialize in Jewelry sales and gold and silver appraisal in Bucks County, PA, helping you get the most value from your precious assets. Our professional jewelry appraisals is important for documenting the value of your pieces.
With 25 years of industry experience and a team of expert gemologists, you can count on us for accurate, timely, and cost-effective appraisals and valuations. If you are looking to invest in physical silver or gold, feel free to contact us today for more information about our offerings and services.
