Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
Silver prices have recently pulled back after hitting a near 12-year high of $35 an ounce last month, but have managed to hold key support above $30 an ounce and were last trading above $31. Year to date, the precious metal is up 30%.
Commerzbank precious metals analyst Carsten Fritsch said in his latest report that silver remains bullish in 2025, with the current gold/silver ratio at around 85, roughly the same level as at the beginning of the year. In other words, silver is still cheap compared to gold.
Fritsch noted that the Fed’s easing cycle has supported investment demand for gold and improved the investment appeal of silver this year, shown by inflows into silver-backed exchange-traded funds (ETFs), while physical gold demand is hovering at a four-year low. Fritsch predicts that silver prices will consolidate support between $32 and $33 in 2025. By the end of 2025, the gold/silver ratio will fall below 80.
Michael DiRienzo, president and CEO of the Silver Institute, recently said that although Trump’s election victory triggered a sell-off in precious metals in the short term, and the threat of tariffs seems to be negative for industrial demand, silver still has some strong momentum to support higher prices in the coming year.
The latest data from the Silver Institute predicts that China’s leading global share of silver demand will continue to rise through 2025. DiRienzo noted optimism about the prospects of China’s economic stimulus boosting industrial demand.
As for investment demand, in exchange traded products (ETPs), the Silver Institute saw annual inflows into these products for the first time in three years, coincide with expectations of further interest rate cuts by the Federal Reserve.
Analysts predict that the Federal Reserve is still expected to cut interest rates two or three times in 2025, which is positive for precious metals as a whole. When interest rates fall, investors want to get out of certain investments and move into hard assets, and silver is one of those hard assets. Silver is still a valuable resource, and with the Green Revolution, silver has a very bright future.
Silver Institute also pointed out that the global silver market will have a physical supply deficit for the fourth consecutive year in 2024, predicting a deficit of 182 million ounces.
And according to investor trading platform Advantrade, over the last three Fed rate cut cycles, from bottom to top, silver prices have actually risen an average of 332%. This can take about a year to two years. And if the U.S. economy enters a recession, which many experts expect to happen in the first half of 2025, silver will also have a strong performance.
Advantrade predicts that the artificial intelligence space could be the next major demand driver for silver. On the technical side, these microchips require silver to function. In the indirect storage space, energy is needed to run the data center. And silver is playing a pivotal role in solar energy.
