Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
As traders began to weigh the potential impact of Trump’s sweeping tariff policy on the precious metals market, the price of Nymex gold futures once being $60 higher than the London spot price, up 2 per cent; while the premium for silver futures also exceeded $1, up 3 per cent on Wednesday.
Market participants believe that the sharp change in the premium reflects the panic mood, a number of banks and funds involve in the New York Commodity Futures Exchange futures trading, while selling the corresponding contract in the London market, this arbitrage behaviour exacerbated the volatility of gold and silver prices.
Analysts at Heraeus Precious Metals said that while a possible recession in the US in the second quarter could affect industrial demand for silver, the grey metal’s recent strength is expected to carry over into the new year, with the price of silver expected to outperform gold in 2025.
In their forecast report for precious metals in 2025, the analysts note that silver prices have seen the biggest gains of all precious metals so far this year (up 26.82 per cent to the end of November). Silver tends to outperform gold in the later stages of a bull market, and if silver prices start to rally, a return of the gold-to-silver ratio to its nearly 27-year average of 67 would imply a rally in the price of silver to $40 per ounce.
Earlier this year, the US bond yield curve ended its longest inversion since 1980. Analysts believe that while some areas of the U.S. economy, including the stock market, are showing relative strength, the U.S. economy could fall into recession by the second quarter of 2025。
In the report, Heraeus analysts wrote, “Silver tends to underperform gold in a recession. If industrial activity shrinks, then growth in industrial silver demand could stagnate, with the exception of demand for electrical and electronic products, particularly solar photovoltaics.”
Meanwhile, solar demand is expected to continue its recent strength through 2025. Analysts expect solar demand for silver to remain strong next year, and it’s not just happening in China. With more and more countries moving towards gigawatt-scale installed capacity, and demand for silver likely to rise again in 2025, supported by more applications of TopCon-type cells that contain more silver per watt.
In addition to this, analysts reiterated that Artificial Intelligence (AI) may be the next key driver of silver demand, especially in the context of the upcoming interest rate cut cycle and recession.
The popularity and growth of AI will propel the demand for technologies such as microchips, where silver’s conductivity is unrivalled. In the future, with the rapid growth in data generation, the demand for storage energy in data centres will also increase, which in turn will drive up the demand for silver. According to statistics, the amount of data globally will increase by 50 per cent in 2025 compared to 2010 to 2016 combined, and AI is a central driver of this growth.
Heraeus analysts concluded by adding that in the recovery phase after a recession, the US Treasury has historically looked for ways to stimulate economic growth, with infrastructure investment usually being the first choice because of its ability to effectively drive economic recovery. Many future infrastructure projects, such as electric vehicle charging stations and solar power facilities, will make significant use of silver.
Analysts predict that the price of silver will fluctuate between $28 and $40 per ounce in 2025.
