Industrial demand remains the main driving force, with consumption expected to increase by 7% in 2024. Silver’s essential role in renewable energy, electric vehicles and electronics continues to expand. Projections suggest that solar panel production alone could consume almost all of annual silver production by 2050. With limited new mining projects and much of the accessible high-grade silver already mined, these shortages could persist for years.
How will gold and Fed policy determine silver’s performance?
Gold’s recovery from recent losses underlines continued investor demand for safe-haven assets. Silver often follows gold, but with greater volatility, reflecting its dual role as an industrial and precious metal. With the Federal Reserve signaling only modest easing in 2025 – with a total cut of 50 basis points – the stronger dollar could provide resistance to silver in the near term. However, any weakening of the dollar, driven by weaker economic data or changing Fed rhetoric, could open the door for silver to rise alongside gold.
Traders will keep a close eye on Powell’s post-meeting comments and inflation data. Should gold attract significant buying interest as a hedge against inflation or geopolitical risk, silver is likely to follow suit.