According to the Silver Institute and Metals Focus, demand for silver in industrial applications is expected to grow 7% year-on-year by 2024, reaching a record 700 million ounces.
This rising demand could help offset downward pressure on the dollar, especially since silver is a key material in electronics, solar panels and other fast-growing sectors.
China’s economic impact and stimulus measures
China, one of the world’s largest silver consumers, recently unveiled a 10 trillion yuan debt package to ease local government financing problems and support economic growth. However, the lack of immediate stimulus disappointed investors, creating some uncertainty about industrial demand for silver from China.
On the plus side, Chinese retail sales in October exceeded expectations, rising 4.8% compared to the forecast 3.8%, while industrial production grew 5.3%.
The National Bureau of Statistics has indicated that consumer expectations are improving and that there are plans to further stimulate domestic demand. Still, silver prices are likely to remain under pressure until more concrete measures point to a sustainable recovery in demand.
Rising demand and a shortage of supply could support prices
A potential shortage in the silver market could also limit price declines. Analysts predict a physical silver shortage of about 182 million ounces in 2024, marking the fourth consecutive year of market shortages.