Are We On Our Way to $40 Silver? Prices Surge 34% YTD

As gold continues to break records, silver is quietly outpacing its more famous counterpart, with prices surging 34% year-to-date. This impressive rally has caught the attention of analysts, including Citi Research, who are increasingly bullish on silver’s prospects.

Specifically, Citi Research called for US$35 an ounce silver by the end of 2024, and US$38-40 silver by the midpoint of 2025 in a research note published on September 23.

The optimism stems from a perfect storm of factors driving both supply constraints and growing demand. On the supply side, weak zinc prices have led to mine closures, while a prolonged strike at a major Mexican mine further restricted output. With over 70% of silver mined as a byproduct of other metals, these disruptions have significantly impacted production.

Simultaneously, industrial demand for silver is booming, particularly in the solar panel sector. The Silver Institute reports that solar-related demand skyrocketed 158% from 2019 to 2023, with expectations of an additional 20% growth this year. This surge is attributed to the global push for clean energy and electrification, where silver plays a crucial role.

Investors are also flocking to silver as a store of value amidst economic uncertainties and expectations of lower interest rates. This dual nature of silver – as both an industrial commodity and a precious metal—makes it uniquely positioned to benefit from current market conditions.

China’s emerging appetite for silver adds another layer of potential growth. As the country grapples with property sector weakness while aggressively expanding its clean energy infrastructure, demand for silver is rising on multiple fronts. With supply deficits projected to continue and aboveground stocks dwindling, analysts see room for further price appreciation.

Information for this story was found via the Wall Street Journal, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.