The global silver market is set to record a physical deficit in 2024 for the fourth consecutive year. Record industrial demand and a recovery in jewelry and silverware will lift demand to 1.21 billion ounces in 2024, while mine supply will rise by just 1%. Exchange-traded products are on track for their first annual inflows in three years as expectations of Fed rate cuts, periods of dollar weakness and falling yields have raised silver’s investment appeal.
These are some of the key findings reported by Philip Newman, Managing Director at Metals Focus, and Sarah Tomlinson, Director of Mine Supply, during the Silver Institute’s Annual Silver Industry Dinner in New York this evening, which featured historical supply and demand estimates for 2024. The following are the key highlights from their presentation:
The silver price has posted a remarkable rally during 2024-to-date, nearly touching $35 for the first time since 2012. Through to November 11, prices have surged by 29% since the beginning of this year. Leaving aside a brief drop to a three-year low of 73, the gold:silver ratio has largely held between 80 and 90 so far in 2024.
Global silver demand is expected to rise by 1% year-over-year (y/y) to 1.21 billion ounces in 2024, making it the second highest in Metals Focus’ series (which starts in 2010). Most of silver’s demand segments are expected to strengthen this year, led by industrial applications. This leaves physical investment as the only key demand component to post a meaningful decline.
Silver jewelry and silverware are both projected to rise by 5% in 2024. For each segment, India has been the key growth contributor, with particularly strong sales between late July and early September when the import duty cut coincided with a pullback in the dollar silver price. Jewelry consumption is also set to grow in the US, which also benefits key Asian and European exporters.
Physical investment in Europe has also weakened, but this year’s decline has been relatively modest following a pronounced fall in 2023. By contrast, India is expected to enjoy higher bar and coin sales, thanks to bullish price expectations and a cut to the import duty on silver bullion.
