The election of Scott Bessent as US Treasury Secretary reassured markets with his gradual approach to trade restrictions, further stabilizing bond markets and reducing interest in non-yielding assets such as silver. .
Industrial and investment demand remains strong
Despite short-term challenges, the long-term demand outlook for silver remains strong. The Silver Institute predicts that global silver demand will increase by 1% in 2024, reaching 1.21 billion ounces. Record industrial demand from the solar power and electronics sectors and a recovery in jewelery consumption are the main drivers.
India, the largest consumer of silver, is also expected to double its imports to 4,554 tonnes in the first half of 2024, reflecting strong industry and investment interest.
On the supply side, the global silver shortage is expected to decrease by 4% to 182 million ounces due to a 5% increase in recycling and increased mine production from Mexico, Chile, and the United States. This trend could help balance supply and demand in the market and limit significant price increases.
Federal Reserve System and Market Trends
Federal Reserve comments added an layer of support to silver prices. Chicago Fed President Austan Goolsby has signaled that interest rates will continue to be cut, and Minneapolis Fed President Kashkari mentioned the possibility of further easing at the December meeting.
Investors are now awaiting the Fed's November meeting minutes for a clearer monetary policy signal.
