The appointment of Scott Bessent as US Treasury Secretary reassured markets with his gradual approach to trading restrictions, further stabilizing the bond market and reducing interest in non-yielding assets such as silver.
Industrial and investment demand remains strong
Despite near-term challenges, the long-term outlook for silver demand remains robust. The Silver Institute predicts a 1% increase in global silver demand by 2024, to 1.21 billion ounces. Record-breaking industrial demand from the solar and electronics sectors, coupled with a recovery in jewelry consumption, are key drivers.
India, the largest consumer of silver, has also seen its imports double to 4,554 tonnes in the first half of 2024, reflecting strong industrial and investment interest.
On the supply side, a 4% reduction in the global silver shortage to 182 million ounces is expected, driven by a 5% increase in recycling and higher mine production from Mexico, Chile and the US. This trend is likely to counter significant price increases, balancing supply and demand in the market.
Federal Reserve and market dynamics
The Federal Reserve’s commentary added a layer of support to silver prices. Chicago Fed President Austan Goolsbee hinted at continued rate cuts, while Minneapolis Fed President Neel Kashkari mentioned the possibility of further easing at the December meeting.
Investors are now waiting for the minutes of the November Fed meeting for clearer monetary policy signals.