Silver Market Forecast 2024 - Bullish Price Predications in 'New Era of Deficit'

Silver prices performed excellently in Q4 2023, increasing +15%. 

But, what are the analysts forecasting for the metal’s price next year? We’ll uncover the main factors impacting the silver market and what price action investors can expect to see in 2024 and beyond.

Silver Price Technical Analysis

The price of silver (XAG/USD) showed heightened volatility throughout this month.  

At the beginning of December, silver reached a new high for the year, peaking above $25.5 an ounce. After this bullish momentum, the precious metal retraced to $22.5 amid the decline of the gold price, following a stronger-than-expected US Jobs report. 

Investors feared this data could diminish the pressure on the Fed to start its easing process in Q1 2024, postponing it by a few months. But after this temporary decline, buyers returned with force, pulling silver back above $24 and confirming that the attention of financial markets on silver is now remarkable.

The scenario has improved technically speaking, opening potential space for a further rebound in 2024. Silver exited from the bearish channel that lasted from May 2023 until mid-November. 

Meanwhile, central banks showing signs of leaning into Quantitive Easing (QE), declining bond yields and growing industrial demand could further support the positive momentum.

Market Data: industrial demand remains strong

Silver demand stems from both industrial and investment sectors. Unlike gold, where industrial applications account for less than 10%, silver sees a substantial portion of its demand, nearly 50%, driven by industrial uses.

Silver is used in various sectors, such as electronics, medicine, green energy, cars and photography, thanks to its unique chemical properties. The two main sectors are electric vehicles and solar panels (photovoltaic), and silver plays a key role in both.

Overall, industrial demand has surged in the last few years and will likely continue to increase over the next few years, considering the growing attention of policymakers to green transition and sustainability topics.

After years of oversupply, the balance between demand and supply of silver has moved to a new era of deficit, as explained by the Silver Institute a few months ago. This scenario could further support the price of the precious metal.

Silver Price Forecast for 2024

The rally in industrial demand is positive for silver, but prices could also be boosted if central banks ease rates quicker than expected. Moreover, the tensions in the Middle East keep the demand for precious metals as haven assets high.

Analyst forecasts are overall positive for the silver price in 2024.

A poll of over 20 silver analysts in October by Reuters highlighted a median price for 2024 of $24.85. The survey was released when the price was around 10-12% lower, and today’s answers would probably be even more bullish.

Other reports, such as one by Investing Haven, released one of the most optimistic forecasts on silver, betting on a rally to $34.7 in 2024, as the top of bond yields has been confirmed. Moreover, they expect the price of silver to peak at $48 between mid-2024 and mid-2025.

So, what are the investors predicting? According to a poll of 2,000 readers, silver will close in 2024 at $29. That prediction is close to the price mentioned in a 2021 report by Goldman Sachs, which forecast silver at $29.50 in 2024 (but also predicted – too optimistically – silver at $28.50 in 2023).

Beyond mere figures, it’s evident that investors are no longer overlooking silver; a significant majority now hold a bullish outlook for the metal in 2024 and 2025.