Silver Outlook to Q1 2025

5.17.24 - Silver Outlook to Q1 2025

Gold last traded at $2,411 an ounce. Silver at $30.94 an ounce.

Silver Outlook to Q1 2025: The hybrid metal is staging a catch-up -wisdomtree.eu

Silver is finally staging its catch-up to gold after underperforming the yellow metal for most of the past year. Silver's year-to-date gains – at 17.6% as of 11 April 2024 – outshines gold’s 13.4%. Most of this catch-up took place in the first week of April.

While many analysts have marvelled at gold’s recent rise to a new all-time high, silver’s gains seemed to have been a long time coming. The metal has been in a supply deficit for three years running and is likely to head into a fourth year of undersupply in 2024. Industrial demand for the metal is rising strongly with increasing demand for photovoltaics, vehicle electrification, 5G technology, and artificial intelligence (AI) applications.

When including investment demand but excluding exchange-traded products (ETPs), silver has notched three years of back-to-back supply deficits, with a 253-million-ounce record-high deficit in 2022 and the second-highest deficit in 2023 of 211 million ounces. When excluding net physical investment (arguably the better way to look at silver balances as silver in investment isn’t ‘consumed’ but stored and is very mobile), silver was in surplus in 2023. Still, it was the smallest surplus on record. We believe that silver will enter another year of deficit in 2024 of a similar magnitude to 2023, when including investment demand. The balance excluding investment is likely to be at its lowest on record.