Across the precious metals complex, gold’s outperformance this year is matched only by silver, which is up 30.5% YTD (gold is up 27.6% YTD). Silver tends to outperform when both macro drivers, the USD and real yields are supporting investor appetite and industrial demand is booming. These two drivers may alternate over the next 12 months rather than co-existing, suggesting that elevated prices are here to stay. Also current Gold to Silver Ratio is about 82.39. Assuming that Gold Silver Ratio reverts back to average of the 21st century at 60:1, the price parity for Silver w.r.t. Gold would be in the range of $51 to $70. Demand supply wise, Silver market is widely tipped to experience a fourth straight year of structural market deficits in 2024. According to the Silver Institute’s estimates in the 2024 WSS, the global silver deficit will rise by 17 percent to 215.3 million troy ounces in 2024 due to an expected 2-percent growth in demand again led by robust industrial consumption combined with a 1-percent decline in total supply. The elevated demand for silver for various industrial use cases means that not only is demand easily outpacing supply but also that there are probably only between 12 and 24 months of silver available before inventories run out. Hence it is a matter of time before investors see the huge demand supply deficit & Silver prices might jump to $50. We recommend to invest in Silver at every dip till $ 28 levels and hold for minimum $40 levels by mid CY25.
