The momentum is building! Is silver on the brink of a big rallyLast week, silver futures (SIZ4) closed at 33.94, marking a new high since 2014 and breaking above the previous 2023 peak. This suggests the potential for further rallies. The weekly spot chart indicates a measured target of 49.
As of 18 October 2024, silver has outperformed other key assets year-to-date, with a 33.84% gain. Gold rose 25.32%, the S&P 500 increased 17.92%, and crude oil gained 5.89%. Whilst technical analysis suggests a silver target of 49, it's crucial to consider fundamental factors alongside this projection.
Silver demand has risen sharply since 2021, outpacing supply growth. 2024 marks the fourth consecutive year of silver deficit. Mine production has slightly decreased since 2013, while industrial demand has surged since 2021. The electronics sector accounts for over 50% of global silver consumption. And in 2023, the industrial demand equal to 80% of the mine production in that year.
Seven of the ten major developed-market central banks are currently in rate-cutting cycles, expected to continue into 2025. The Federal Reserve is anticipated to cut rates in November and December. The US presidential election in November, along with Congressional and Senate races. The new government functionality until mid-January. With the debt ceiling due on 2nd January and the new Congress convening on 3rd January, the Fed is likely to maintain its December rate cut. Increasing global liquidity from central banks is expected to sustain the gold and silver rally.
When silver rally and new highs repeat all the time in the news, more investors will be attracted to whole SLV, etf of silver and this will increase the demand further.
