Global demand driven by green energy, automotive and electronics
Global industrial demand for silver is expected to grow by 7% in 2024, surpassing 700 million ounces for the first time. The push for renewable energy, especially solar, has been a key driver as the sector is heavily dependent on silver.
Demand for silver in the electronics and automotive industries also remains strong, supporting overall consumption. Moreover, demand for silver jewelery and silverware is expected to increase by 5%, driven by rising imports to India, thanks to reduced import duties.
Decline in physical investments, but the inflow of ETPs is increasing
Despite strong industrial demand, investment in physical silver is expected to fall 15% this year, hitting a four-year low. Reduced economic concerns have dampened retail demand for silver coins and bars.
However, exchange-traded products (ETPs) are seeing robust inflows as expectations of Fed rate cuts and a potential weakening of the dollar make silver an attractive hedge.
The strength of the dollar and China’s stimulus are impacting the outlook for silver
A strengthening US dollar, supported by expected fiscal policy, has provided headwinds for silver. The rise in the dollar increases the price of silver in other currencies, which can limit demand.
The upcoming US inflation data, which is expected to show a 2.6% annual increase in the consumer price index, could determine the Federal Reserve’s future policy. Analysts predict that further rate hikes to control inflation could boost the dollar, putting pressure on silver prices.