As 2024 draws to a close, Silver's extraordinary performance underscores its importance as an industrial and safe-haven asset. Up nearly 28% for the year—matching Gold's stellar gains—Silver benefited from mounting industrial demand, geopolitical turbulence, and an increasingly uncertain global economy. Its trajectory throughout the year signals a bright future, with many analysts predicting an ascent to unprecedented levels as Silver aims to challenge its all-time high of US$52 in the coming years.
Here’s a quarter-by-quarter breakdown of Silver's remarkable journey in 2024, complemented by insights into the forces shaping its market.
Q1 2024: A Tentative Start with Signs of Momentum
Silver began the year on shaky ground, reflecting its subdued performance in 2023. However, renewed optimism emerged by late February as speculation over rate cuts gained traction. Prices climbed from the US$22 spot range to above US$25 spot by early March.
- Highlight: Peter Krauth, editor of Silver Stock Investor, highlighted Silver’s strong outperformance relative to Gold, noting that Silver surged 22% by the end of Q1 compared to Gold's 15% gain.
- Key Insight: Tightening supply dynamics became a talking point, with Krauth warning that aboveground inventories could be depleted within 12 to 24 months—a critical factor driving the metal’s bullish outlook.
Q2 2024: Breaking Barriers and Industrial Growth
The second quarter marked a turning point as Silver broke through the US$30 spot barrier. This rally was largely attributed to surging industrial demand and speculative buying amid global economic uncertainty.
- Indian Demand: India imported more Silver in the first four months of 2024 than in the entirety of 2023. Beyond jewelry, demand was driven by the country’s growing photovoltaic and electronics industries, which are central to its renewable energy goals.
- Industrial Momentum: Solar energy initiatives in India spurred Silver consumption, bolstered by government incentives promoting local production.
Q3 2024: Consolidation and Strategic Moves
Silver experienced a consolidation phase during Q3, with prices briefly retreating to US$26 spot before rebounding above US$32 spot by quarter-end. A Federal Reserve rate cut in September provided the needed catalyst for recovery.
- Corporate Confidence:
- First Majestic Silver’s US$970 million acquisition of Gatos Silver brought a 70% stake in the Cerro Los Gatos mine, enhancing its production capabilities.
- Coeur Mining's US$1.7 billion acquisition of SilverCrest Metals positioned it as one of the world's leading Silver producers, with projected annual output exceeding 21 million ounces by 2025.
These strategic mergers highlight the confidence major players have in Silver's enduring industrial and monetary value.
Q4 2024: Volatility and Record Highs
The final quarter saw Silver reach heights not seen in over a decade, driven by geopolitical tensions and safe-haven demand.
- Key Milestones:
- Silver hit a year-to-date high of US$34.72 spot on October 22, spurred by escalating conflicts in the Middle East and Eastern Europe.
- Despite a brief dip following the November U.S. presidential election, Silver demonstrated resilience, rebounding to trade around US$31.88 spot by mid-December.
- Broader Implications: The ongoing volatility reinforced Silver’s dual appeal as both a store of value and a hedge against global instability.
The Canadian Connection: Fragility Among Allies
As 2025 looms, Canada’s economic relationship with the United States will face renewed challenges, particularly with Prime Minister Trudeau navigating a dynamic partnership with a re-elected Donald Trump. This evolving dynamic will serve as a reminder of the fragility of the global economy, even among longstanding allies. For Canadian investors, Silver and Gold are essential hedges against potential turbulence, ensuring financial security in unpredictable times.
The Path Ahead: A Historic Breakout?
Looking to 2025 and beyond, the outlook for Silver and Gold remains profoundly bullish. Analysts anticipate Silver will continue its ascent, with the potential to break its all-time high of US$52 spot. Factors driving this optimism include:
- Geopolitical Risks: Ongoing instability in regions like Eastern Europe, the Middle East, and Asia ensures robust demand for safe-haven assets.
- De-Dollarization: Global concerns about the U.S. dollar’s long-term viability will likely bolster demand for tangible assets such as Silver and Gold.
- Industrial Expansion: The transition to green energy technologies and global infrastructure investments will amplify demand for Silver, particularly in sectors like solar energy and electronics.
A Golden Era for Precious Metals
With Gold nearing all-time highs and Silver poised for a historic breakout, the stage is set for a transformative period in precious metals markets. As we enter 2025, both metals are expected to remain at the forefront of wealth preservation strategies, offering unparalleled opportunities for investors navigating an uncertain global landscape.
Stay tuned as we track this compelling journey into a new era of precious metals ownership.
Yours to the penny,
Darren V. Long
