Why Experts Think Silver Will Outperform Gold in 2024?

Published on: February 7, 2024
Author: Caroline Kong

In a recent report, the Silver Institute stated that global demand for silver is expected to reach 1.2 billion ounces in 2024, which would be the second highest level on record. As a result, this could be an unusual year for silver, with prices likely to be pushed to their highest point in nearly a decade.

Michael DiRienzo, Executive Director of the Silver Institute, said, “We think silver will have a great year, especially on the demand side. Silver prices are expected to reach a new 10-year high of $30 per ounce.” The last time the price of silver reached $30 was in February 2013.

The Silver Institute predicts that demand for silverware will grow by 9% and jewellery by 6% this year, with India expected to drive jewellery purchases, while a recovery in consumer electronics will further fuel the boom in the silver market. In the short term, however, the slowdown in China and the reduced likelihood of a US interest rate cut early in the year could be detrimental to institutional investment demand for silver, but this situation could improve considerably in the second half of 2024.

Randy Smallwood, chief executive officer of Wheaton Precious Metals, said that silver usually moves in the same direction as gold, but silver usually gets a late start. Because of silver’s widespread industrial use, its performance is usually closely tied to the health of the overall economy or business cycle. In contrast, gold prices usually rise during periods of economic weakness or uncertainty.

Because of this, silver is more sensitive to economic changes and tends to be more volatile than gold. Silver tends to outperform gold during periods of strong economic expansion, but it underperforms gold during periods of economic weakness.

Taking the gold-silver ratio as an example, currently is 90:1, which is at a historically high level. Analysts note that what investors usually see happen is that gold will spike first, and then silver quickly takes off. Eventually, silver often outperforms gold. In 2024, if the price of gold is able to top $2,200 per ounce, then silver may even top $50. Currently, the price of gold is near $2,034 per ounce and the price of silver is near $23 per ounce. Comparing the two, the upside is clearly much greater for silver than for gold.

DiRienzo of the Silver Institute expressed a similar view that silver could indeed outperform gold, especially if the Federal Reserve starts easing interest rates.

If you’re interested in investing in silver, you might want to keep an eye on this company: Silver Storm Mining Ltd. (TSXV:SVRS). Silver Storm Mining Ltd. holds advanced-stage silver projects located in Durango, Mexico. Golden Tag recently completed the acquisition of 100% of the La Parrilla Silver Mine Complex, a prolific operation which is comprised of a 2,000 tpd mill as well as five underground mines and an open pit that collectively produced 34.3 million silver-equivalent ounces between 2005 and 2019. The Company also holds a 100% interest in the San Diego Project, which is among the largest undeveloped silver assets in Mexico.

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