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Are Silver Prices on The Verge of a Major Breakout?

By:
Phil Carr
Updated: Jun 5, 2024, 13:53 GMT+00:00

With so much hot money chasing the Commodities Supercycle – there is no denying the entire sector presents a hotbed of opportunity for traders looking to achieve extraordinary gains.

In this article:

Gold and Copper Reach Unprecedented Heights, Silver Set to Follow

After an epic run that has seen Gold and Copper prices set new all-time record highs not once, not twice, but on multiple occasions, so far this year – analysts at GSC Commodity Intelligence have officially dubbed 2024 “The Year of The Metals”.

To quote GSC Commodity Intelligence – “Gold and Copper’s record-breaking run over the last two consecutive quarters in a row has been nothing short of impressive. Never before in history have we seen the metals score multiple all-time highs in such a short space of time”.

While there remains a growing buzz of excitement surrounding Gold and Copper with prices topping $2,450 an ounce and $11,104 per ton respectively, for the first time ever – traders are starting to shift their attention to Silver on rising expectations that the grey metal will be next to hit new record highs.

Silver Shortage Intensifies in 2024 Amidst Surging Industrial Demand

According to the recently released World Silver Survey – 2024 marks the fifth consecutive year of a Silver shortage – with this year in particular being one of the most intense on record.

Silver demand exceeded supply in 2023, resulting in a structural market deficit of over 142 million ounces. The forecast indicates that the annual production shortfall will nearly double to 265 million ounces by the end of 2024, due to surging industrial demand.

Historically, half of the demand for Silver has been industrial and the remaining half has predominantly been investment related. However, in recent years, the balance has shifting in favour of industrial demand, which currently accounts for 64% of the total global demand for Silver. Put another way, that’s a whopping increase of 19% from a year ago.

And this trend shows no sign of slowing down anytime soon.

Catalysts Behind Historic Squeeze in Silver Supply

The major catalysts behind an historic squeeze in Silver supply include the Green Energy Transition, with Solar Energy playing a pivotal role. Alongside unprecedented demand from Artificial Intelligence and the EV sectors – which are undoubtable three of the fastest and biggest growing industries in the world today.

These worsening supply and demand dynamics have sent Silver prices on a parabolic run since October last year, rallying from just under $20 an ounce to a 12-year high of $32.50 an ounce in May – notching up an impressive gain of over 62%, over a seven-month stretch.

Now Silver’s stealth bull run has come out of hiding – the precious metal is making headlines and capturing the world’s attention like never before.

The last time Silver prices broke above $32 an ounce – the precious metal went onto trade at $50 an ounce in the space of 100 days. If this is a leading barometer for predicting the future performance of Silver prices, then this ultimately means one thing.

Higher Silver prices are coming!

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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