The rate cut announced by the Fed (the Federal Reserve of the United States) caused silver prices to rise. But the prices of the metal are also driven upwards by more and more numerous applications in industry.
The fall in rates in the United States not only benefited gold. After the announcements by the American Federal Reserve (Fed) on September 18, investing in the dollar became less profitable and silver was reinforced in its function as a safe haven. Like gold, it saw its prices jump until returning last week to a level that had not been reached since 2012: $32.71 per ounce.
With these latest increases, the white metal has gained 35% since the start of the year. Paradoxically, its current value could lead some investors to withdraw and resell their coins and bars. THE Silver Institute also plans a disinvestment of 13% in 2024.
Rising industrial needs
The metal, which will no longer be hoarded, will then be put back into the circuit and will help supply the growing demand of the industry. Silver is increasingly used by the photovoltaic sector: last year, almost 20% of industrial demand was dedicated to the construction of solar collectors, a little less than was absorbed by jewelry , another key sector for money. But in 2024, this will no longer be the case. Photovoltaics will come first. According to the Silver Institute, this is the application that should experience the strongest growth of the year (+20%). Growth in this area had already, in 2023, been higher than forecast.
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Fundamentals that do not explain prices
This year, the mining supply added to the quantities of recycled white metal may not be sufficient to meet the needs of manufacturers. But roughlythe market has been in equilibrium for several years. Fundamentals, which refer to supply and demand, do not justify large price variations.
What unbalances the market and prices is therefore essentially the evolution of investment demand, explains Didier Julienne, president of Commodities & Resources. A demand largely dependent on the ups and downs of the global economy.
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