Industrial Demand For Silver To Set New Record High In 2024

Above, 2024 American Silver Eagles. Photo by Armand Vaquer.

While gold has dropped some in value, silver is on the rise this year. For those of us who invested in it while its spot price was in the 20s, this is good news. Currently, COMEX silver spot price is around $30/toz.

The reason for silver's rise in its spot price: industry.

According to Kitco News:

(Kitco News) – The global silver market is on pace to record a physical deficit in 2024 for the fourth consecutive year, with the growth of demand from industry the main driver, according to the latest Interim Silver Market Review from the Silver Institute released Tuesday evening. 

“Record industrial demand and a recovery in jewelry and silverware will lift demand to 1.21 billion ounces in 2024, while mine supply will rise by just 1%,” they said. “Exchange-traded products are on track for their first annual inflows in three years as expectations of Fed rate cuts, periods of dollar weakness and falling yields have raised silver’s investment appeal.” 

The report was authored by Philip Newman, Managing Director at Metals Focus, and Sarah Tomlinson, Director of Mine Supply at the Silver Institute, and it features the latest price, supply and demand data for the current year. 

“The silver price has posted a remarkable rally during 2024-to-date, nearly touching $35 for the first time since 2012,” they wrote. “Through to November 7, prices have surged by 34% since the beginning of this year. Leaving aside a brief drop to a three-year low of 73, the gold:silver ratio has largely held between 80 and 90 so far in 2024.”

To read more, go here.  

Higher Silver Prices Needed To Meet Solar Demand

Above, 2022 American Silver Eagles. Photo by Armand Vaquer.

"You're not going to go and melt grandmother's silver tea service at $35 an ounce."

Since silver is an important "ingredient" in solar panels, it's a wonder why the metal hasn't risen much higher than it has. A friend has solar panels at his house. We joke that we should undertake a guerilla operation to scrape the solar panels for the silver. 

Right now, silver's spot price is hovering around $23/toz. 

Along with solar panels, silver has other industrial uses. One even has silver inside their cell phones. 

From BullionVault:

Today silver is invaluable to solder and brazing alloys, batteries, dentistry, glass coatings, LED chips, medicine, nuclear reactors, photography, photovoltaic (or solar) energy, RFID chips (for tracking parcels or shipments worldwide), semiconductors, touch screens, water purification, wood preservatives and many other industrial uses. 

According to Kitco News, silver's prices need to go higher to meet solar demand. 

They wrote:

(Kitco News) - Investment demand in silver has been fairly disappointing through most of 2023; however, one mining executive said that this is not the segment of the market investors should be paying attention to.

In an interview with Kitco News, on the sidelines of the London Bullion Market Association 2023 Global Precious Metals Conference, Phillips Baker, CEO of Hecla Mining, said that investors need to pay attention to industrial demand and the solar power sector continues to consume massive amounts of the precious metal.

"Right now, ETF demand is the sideshow. Silver's use in Photovoltaic (PV) solar panels is going to drive silver prices higher," he said. "This is not an issue that will be going away anytime soon. The need for Photovoltaic solar panels will drive demand for the next decade.

The bullish comments come as silver prices test resistance just below $23 an ounce, up 9.5% from September's multi-month lows below $21 an ounce.

According to data from the Silver Institute, in the last decade, silver demand has grown 150%. Last year, 140 million ounces of silver was used in solar panels. There are expectations that 160 million ounces will be used in solar panels this year, a 28% increase from last year.

To read more, go here.