Silver, outgaining gold YTD, set for second highest-ever market deficit in 2024 - report
Apr. 17, 2024 5:55 PM ET
By: Carl Surran, SA News Editor
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Silver's gains having been running even hotter than gold so far this year, and the global market for the metal is expected to mark a fourth straight year of a structural deficit, according to the Silver Institute's annual World Silver Survey.
The global silver deficit is forecast to rise by 17% to 215.3M oz in 2024 due to a 2% growth in demand to a fresh record high 1.22B oz, led by strong industrial consumption, alongside a 1% decline in total supply, according to the report, which is produced by researchers at the Metals Focus consultancy.
The study showed an estimated silver market deficit of 184.3M oz for 2023, the second-highest deficit on record, surpassed only by 2022's deficit of 263.5M oz.
Despite the deficit, visible silver inventories, as well as vast metal stocks held by individuals and investors, continue to protect the silver market from a squeeze for now.
"Identifiable silver inventories, as well as metal held off exchange, remain sizable. However, some of this silver may be tightly held, so it will be interesting to see, going forward, what impact ongoing deficits have on the market," Metals Focus managing director Philip Newman said.
While "the traditional view is that silver will outperform gold in a bull market," front-month silver has climbed 14.3% so far in April and 18.8% this year; gold has gained 6.9% this month and 15% YTD.
Front-month Comex silver ( XAGUSD:CUR) for April delivery closed Wednesday +0.1% to $28.346/oz, its 14th gain in the past 15 sessions, while front-month April Comex gold ( XAUUSD:CUR) finished -0.8% to $2,371.70/oz, still the second-highest settlement in history.
ETFs: ( GLD), ( GDX), ( GDXJ), ( IAU), ( NUGT), ( PHYS), ( GLDM), ( AAAU), ( SGOL), ( BAR), ( OUNZ), (NYSEARCA: SLV), ( PSLV), ( SIVR), (NYSEARCA: SIL), ( SILJ)
"Geopolitical uncertainty continues to support gold, [and] prices will only come lower if central banks stop buying or if investors go back to a risk-on phase," Blue Line Futures chief market strategist Phillip Streible told Reuters.
Analysts at SP Angel say they still see strong retail interest among average consumers looking for easy-to-procure hedges against continued inflation, noting Costco has been selling out of $2,000/oz gold bars. |
