Why Silver?
Silver is a unique commodity in that its demand is sourced from both its investment appeal and its use for industrial purposes. Similar to gold, silver's investment appeal lies in its centuries-long track record as a global store of value. As a result, the silver price tends to have a relatively high correlation to gold with investor interest driven by its 'safe haven' status particularly as it relates to geopolitical uncertainty, currency devaluation by central banks and as a hedge against inflation. On the industrial side, silver's unique qualities, such as its remarkably high conductivity and ductility, make it an essential component in electric vehicles, solar energy and energy storage. The shift to a greener future is expected to underpin strong growth in industrial demand for silver for decades to come.
The Outlook for Silver
In 2024, the Silver Institute predicts that the silver market will be in deficit for the fourth consecutive year. Demand for silver is expected to continue to grow, with total consumption expected to reach 1.2 Boz in 2024 driven largely by stronger industrial offtake. The growth in green energy initiatives continues to be an important source of demand with silver consumption related to electric vehicles and solar energy tripling over the last 10 years.
The supply of silver has been relatively flat in recent years. The Silver Institute estimates total mine production in 2024 at 843 Moz, an increase from the previous year, but below the 896 Moz produced a decade earlier. Year-over-year growth in mine production is expected to be partially offset by lower volumes from recycling, with total silver supply in 2024 estimated at 1.02 Boz.
Further information on the supply and demand outlook for silver can be found at the link below: