Silver Price Update: Q2 2024 in Review

Industrial silver demand continues climbing in India, China

Improved sentiment has coincided with heightened industrial demand, particularly in the Indian market. Overall, silver demand is projected to grow by 2 percent in 2024, with the Silver Institute forecasting that industrial demand will increase by 9 percent — photovoltaics alone are expected to see a 20 percent gain.

As mentioned, India in particular has upped its silver purchases in 2024. Its imports came to a record 2,295 metric tons of silver in February, nearly outstripping an entire month of global mine supply. Though purchases have waned as prices have risen, the first four months of the year saw India import more silver than it did for all of 2023.

DiRienzo said that while the primary silver demand in India continues to be from the production of jewelry, the precious metal has also benefited from “firmer electrical & electronics demand, thanks to the continued strength in India’s real estate market and rising investment in local infrastructure construction.”

Additionally, he noted that Indian manufacturing of solar cells received additional support as companies reduced their reliance on Chinese manufacturing and diversified their supply lines for solar panels.

India has been the biggest driver in the photovoltaics category as the country continues building up its domestic solar supply chain through efforts such as its Approved List of Models and Manufacturers, which consists wholly of domestic companies. After a pause due to supply concerns last year, the nation's government reinstated the mandate as of April 1 of this year — as a result, government-funded and subsidized solar projects in India must source their solar photovoltaic modules from one of the companies included on the list.

Even so, China remains the global leader in photovoltaics production. And with new N-Type TopCon panels — which require 50 percent more silver — set to become the industry standard, industrial demand is set to rise even further.

Last year, a flagging Chinese economy not only put base metals under pressure, but dragged on silver as well. According to DiRienzo, fiscal stimulus measures implemented by the Chinese government have provided crucial support.

“Expectations on further fiscal stimulus for the Chinese economy led to a sharp rebound in base metal prices during 2024-to-date, which has benefited silver,” he said.

How high can the silver price rise in 2024?

While gold tends to garner more of the media attention, silver has already been a stronger performer in 2024. Since its move began this year, a variety of experts have suggested the white metal has further to go.

In an interview with INN on July 3, Chris Vermeulen, chief market strategist at TheTechnicalTraders.com, suggested that silver is at a multi-year consolidation. He thinks a run over the next few months to US$36 per ounce is a possibility.

Peter Krauth, editor of Silver Stock Investor, told INN on May 24 that silver might experience a slight pullback over the next couple of months, but would likely establish a new floor at US$30. This came to pass as silver traded in the US$29 range in June before stabilizing above US$30 through the first half of July.

“We still have the gold-to-silver ratio somewhere around 75; it's averaged about 55 or 60 over the last few decades, so just on that basis if gold were to stay put, silver has a lot higher to go,” Krauth said.

“Typically when you get the ratio running down, both metals do well, but silver continues to do even better … so look for this to be a really tremendous run over the next months and years," he added.

While this might not be good news for manufacturers that require silver and consumers who buy their products, it's positive news for existing silver investors and new market participants who are looking for opportunities for a safe-haven investment that doesn’t come with the high entry point of gold.

There are also opportunities in silver stocks, which have been undervalued in recent years — in fact, many silver stocks have already seen significant gains this year. For example, silver producer Endeavour Silver and advanced development-stage companies GR Silver Mining (TSXV:GRSL,OTCQB:GRSLF) and Defiance Silver (TSXV:DEF,OTCQX:DNCVF) have all gained more than 100 percent from the start of the year through July 9.