What are precious metals analysts saying about 2024 silver investing?

“Demand for the white metal is forecast to reach 1.2 billion ounce this year, a move that would rank as the second highest level on record, the Silver Institute said in a recent report.

“We think silver will have a terrific year, especially in terms of demand,” said Michael DiRienzo executive director of the Silver Institute during a recent interview. He expects silver prices to reach US$30 an ounce this year, the highest level in 10 years. On February 7, 2024, spot silver was trading at US$22.26 an ounce.

Canada produces silver as a by-product of other mining activities, namely copper, zinc, nickel, lead and gold primary mines. In 2022, Canada ranked as the world’s 13th largest silver producer. Canada is also the USA’s second largest source of silver, providing 21% of that country’s silver imports.

Stronger industrial offtake has been identified as the key driver of rising global demand, which is expected to outstrip supply by about 42 million ounces this year, according to the Silver Institute.

Silver has been identified as the best electrical conductor, the best metallic thermal conductor, and the best reflective material. These qualities make silver an essential and irreplaceable component for many industrial and technological applications, including solar energy, nuclear energy and electric vehicle production.

Approximately 10% of the global silver supply is currently being used for building photovoltaic panels for solar power generation, while another 30% is being used in other electrical applications such as electrical componentry for electric vehicles. As a result, future demand is expected to be driven in part by the electrification of the global transportation industry.

Silver is also a key component in the buildout of 5G networks, the next major evolution in communication technology, as well as having medical and sanitary applications because of its antibacterial properties.

For many of these reasons, senior mining industry representatives have sent a letter to the Canadian government calling for silver to be designated as a critical mineral, primarily because the metal is required for this country’s national transition to a sustainable low-carbon and digital economy.

However, while silver has long been known as the “poor man’s gold,” it is worth noting that like gold, silver is affected by some of the same economic and geopolitical factors that impact the price of the yellow metal.

As both gold and silver have an inverse relationship with interest rates, the Silver Institute believes that silver could outperform gold this year, especially if, as expected, the U.S. Federal Reserve moves to lower interest rates.”