Philip Newman

Silver has had a good start to 2024, benefiting from the strong gold price. That said, silver has underperformed, with the ratio between the two metals rising to 89, its highest since March last year. This illustrates two challenges for silver this year. First, safe-haven interest is mainly centred on gold. Second, concerns about the Chinese economy and its impact on base metals can weigh on silver, given its strong industrial characteristics. In the next few months, silver should also face headwinds from US monetary policy easing falling short of expectations. The silver price will be supported by strong fundamentals, epitomised by the large silver market deficit we forecast this year. While mine supply is expected to hit a six-year high, total supply will still fall short of global demand in 2024, marking the fourth successive deficit. This largely reflects the health of silver industrial offtake, which this year is set to hit a new high, while a recovery in the Indian market will underpin gains in jewellery and silverware. Overall, while we expect average annual gold prices to edge higher in 2024, silver will underperform, resulting in a full-year average of $22.90 this year, down 2% y/y.