Silver emerged as a standoff performer in 2024, delivering an impressive 21.46% return and breaking free from its multi-year consolidation pattern
Despite challenges for elevated real interest rates and a robust U.S. dollar, the precious metal maintained its strong correlation with gold, reaffirming its status as a monetary asset
This resilience was further reflected in strengthening investor sentiment, evidenced by positive shifts
in both CFTC data and ETF positioning. While recent headlines have focused on potential demand headwinds
particularly concerning weakness in the Chinese market and possible solar panel tariffs
the more critical factor for 2025 may be emerging from the supply side
Approximately 72% of global silver production comes as a byproduct of lead zinc and other metal binding operations
With forecast suggesting a potential slowdown in Chinese lead and zinc demand
this could trigger a significant reduction in silver supply, potentially catalyzing upward price movement
The demand outlet for silver remains robust, supported by several key drivers
We anticipate the shift in global monetary policy, ongoing economic recovery, and expanding industrial applications
particularly in solar energy and electrification, to fuel demand growth. The reshoring of solar panel production and continuing technological advancements in solar energy efficiency are likely to counterbalance any negative impact for potential Chinese solar panel tariffs
Solar energy's remarkable cost competitiveness stands as a particularly bright spot for silver
demand. In many places, current solar energy costs have dropped significantly below traditional
energy sources like coal and natural gas. We combined with advanced battery storage
solutions that address interminacy concerns, solar energy's value proposition becomes even more
compelling, suggesting sustained demand for silver in photo- metallic applications. From a technical perspective, silver's breakthrough from its multi-year consolidation range in
2024 signals the potential for further price appreciation. This technical straight, combined with favorable supply demand dynamics, positions the metal
for potential gains in 2025. In our view, metal's persistent correlation with gold prices adds another layer of support
particularly in an environment where monetary and geopolitical uncertainties remain elevated. Looking ahead, silver's dual role is both an industrial metal and a monetary asset
may provide a compelling value proposition for investors. With supply constraints potentially emerging and demand drivers remaining strong
the outlook for silver in 2025 appears increasingly instructive