Will 2024 Be The Year When Silver Prices Hit $50 An Ounce?

2024 The Year of the Metals – Gold Soars to New Heights

After an epic run that has seen Gold prices set new all-time record highs not once, not twice, but on multiple occasions in the first half of the year – analysts at GSC Commodity Intelligence have officially dubbed 2024 “The Year of The Metals”.

According to GSC Commodity Intelligence – “what we’re seeing in the precious metals market is nothing short of extraordinary. It may only be a matter of weeks, if not days before Gold prices set another all-time record highs”.

With that being almost a given now, traders are starting to shift their attention to Silver on rising expectations that the grey metal will be next to score new record highs.

Silver Shortage Intensifies in 2024 as Industrial Demand Surges

A recently released annual World Silver Report, showed 2024 marks the fifth consecutive year of a Silver shortage – with this year in particular being one of the most intense on record.

Silver demand exceeded supply in 2023, resulting in a structural market deficit of over 142 million ounces. The forecast indicates that the annual production shortfall will nearly double to 265 million ounces by the end of 2024, due to surging industrial demand.

Historically, half of the demand for Silver has been industrial and the remaining half has predominantly been investment related.

However, in recent years, the balance has shifting in favour of industrial demand, which currently accounts for 64% of the total global demand for Silver. Put another way, that’s a whopping increase of 19% from a year ago.

And this trend shows no sign of slowing down anytime soon.

The major catalysts behind an historic squeeze in Silver supply include the Green Energy Transition, with Solar Energy playing a pivotal role. Alongside unprecedented demand from Artificial Intelligence and the EV sectors – which are undoubtable three of the fastest and biggest growing industries in the world today.

Worsening supply and demand dynamics have sent Silver prices on a parabolic run since October last year, rallying from just under $20 an ounce to a 12-year high of $32.50 an ounce last month – notching up an impressive gain of over 62%, over a seven-month stretch.

And the rally might not stop there!

In a note to clients, analysts at GSC Commodity Intelligence wrote that “Silver has a habit of lagging behind Gold for extended periods of time, but once it gets going, it really gets going”.

Bottom Line

Generally, Gold will shoot up first and then you will see Silver take off when you least expect it. And Silver always outperforms.

Whichever way you look at it, one thing is clear. Silver is still relatively cheap compared with Gold and certainly has a lot of catching up to do. To quote analysts at GSC Commodity Intelligence – “Silver is definitely the best trade right now and the one to watch in the second half of 2024”.