Silver Prices Expected to Rise in Next 3 Months

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Thanks to expectations of further interest rate cuts from the Fed, precious metal prices are soaring, with silver $Silver - main 2412(SImain)$ hitting its highest point since 2012.

Silver has been one of the standout commodities this year. The Fed's shift toward more accommodative policies and prospects for further rate cuts are giving precious metals a boost.

Plus, as China takes steps to invigorate its economy, the industrial demand for silver could rise, providing even more support for its price.

Amelia Xiao Fu, head of commodities at CICC, stated:

“With continuous rate cuts and potential ongoing stimulus from China, we expect silver to keep climbing in the coming quarters, aiming for $37.”

Ole Hansen, head of commodity strategy at Saxo Bank, mentioned：

“Silver is seen as a cheaper alternative to gold. As gold hits new highs and copper prices rise to a two-and-a-half-month peak, traders are pushing silver above the $32.50 resistance level. China's stimulus is boosting industrial metals, which is exactly what silver traders have been waiting for. With gold continuing to strengthen and industrial metal prices stabilizing at higher levels, silver should outperform gold.”

Citi analyst Max Layton noted：

“Rate cuts should provide a bullish momentum for global economic activity and support silver consumption. We expect silver to rise to $35 in the next three months and reach $38 in the next 6-12 months.”

Carsten Menke from Julius Baer believes that, in the medium to long term, silver’s performance will largely depend on gold, rather than any specific conditions in the silver market.

Additionally, there are signs of a rebound in inflows to silver-backed exchange-traded funds (ETFs). Silver is one of the most widely used commodities after oil, with over 10,000 applications worldwide.

In 2023, the silver market is facing a supply gap of 15%, and it’s estimated that from 2020 to 2024, the cumulative gap will reach 1.0934 billion ounces. Despite recent gains, silver prices are still well below the nearly $50 all-time high from 2011.