The silver price put on a strong performance in 2024, hitting highs not seen in over a decade.
Despite some volatility, factors like increasing industrial demand, safe-haven buying from investors and weakening mining supply all came together during the year to support gains in the price.
All told, silver is up nearly 35 percent since the start of 2024, outperforming gold’s 32 percent gain.
Silver price in Q4
Silver began Q4 on a strong note, reaching US$31.37 per ounce on October 1 and climbing to US$32.18 on October 4; it then slipped to US$30.49 on October 9. However, the white metal’s price didn’t remain low for long. It surged to its year-to-date high of US$34.72 on October 22, also reaching its highest level in 12 years.
The most significant tailwinds for silver came from geopolitical tensions, with what appeared to be a greater likelihood of the Israel-Palestine conflict spilling over into a broader regional war in October. Israel’s attacks on Lebanon, Syria and Iran saw more investors seek the haven of precious metals, benefiting silver.
As November began, the price of silver was again in retreat, trading at US$30.24 by November 15.
Silver faced headwinds following the US presidential election on November 5, losing nearly 5 percent in a single day as some investors fled to interest-bearing assets. However, the metal’s losses were somewhat softened after the US Federal Reserve made a 25 basis point cut to its benchmark rate on November 7.
Silver price, Q4 2024.
Chart via Trading Economics.
As the month worse on, silver saw volatility, spiking to US$31.34 on November 22. The rise came as safe-haven investors flocked to the metal following an escalation in the war between Russia and Ukraine. The US, UK and France said they would allow the use of long-range missiles by Ukraine to attack military targets inside Russia.
Previously, Ukraine had only been allowed to use the missiles to strike targets along the border.
The response from Russia was a policy change that would permit the use of nuclear weapons against countries supported by nuclear powers. Following the move, Russia launched a test of an intermediate-range ballistic missile capable of carrying a nuclear payload on a target within Ukraine.
Silver fell to a quarterly low of US$30.11 on November 27, but since then the precious metal has regained some ground. As of December 11, it was trading at US$31.88.
The next Fed meeting is set to run from December 17 to 18. Most analysts expect the central bank to make one last 25 basis point cut before pausing in 2025.
How did silver perform for the rest of the year?
Silver price in Q1
Silver started the year on a low note as its lackluster performance from 2023 carried over.
However, rate cut expectations added momentum to silver at the end of February and the beginning of March, which pushed the price up from the US$22 range to above US$25.
Krauth also mentioned declining aboveground silver inventories.
“I think there may be 12 to 24 months left before they run out,” he said.
Silver price in Q2
The big news from the second quarter was silver breaking through the US$30 barrier.
The price continued to be fueled by rate cut speculation, but also saw support from industrial segments as demand from India soared. The country imported more silver during the first four months of 2024 than all of 2023.
Industrial segments, particularly photovoltaics production, have been a driver of Indian demand as the country works to build up its domestic solar supply chain through its approved list of models and manufacturers.
Silver price in Q3
Silver didn’t see much upward momentum through most of the third quarter.
Instead, it saw a significant retreat toward US$26. Still, by the end of the quarter, a Fed rate cut had provided a substantial tailwind for silver, sending it above the US$32 mark by the end of September.
The quarter also saw First Majestic Silver (TSX:AG,NYSE:AG) announce on September 5 that it would purchase all of the issued and outstanding shares of Gatos Silver (TSX:GATO,NYSE:GATO) in a US$970 million transaction.
The deal will give First Majestic a 70 percent stake in the Cerro Los Gatos mine in Northern Mexico. The combined entity’s anticipated annual production is 30 million to 32 million silver equivalent ounces.
This was followed on October 4 by Coeur Mining’s (NYSE:CDE) agreement to acquire SilverCrest Metals (TSX:SIL,NYSE:SILV) for US$1.7 billion. The deal will create one of the world’s largest silver producers, with annual output of 21 million ounces of the white metal projected by 2025.
The deal will give Coeur 100 percent ownership of the recently opened Las Chispas mine in Sonora, Mexico, which is projected to sell 9.8 million to 10.2 million silver equivalent ounces this year.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.