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2024 Silver Price 'Boosted' by Gold, 'Tempered' by Recession

Gold/silver ratio usually rises in economic and industrial slowdown...
The PRICE of SILVER is widely forecast to rise again in 2024, but a global economic slowdown could cap its gains even as industrial demand remains close to record highs, pushing up the Gold/Silver Ratio of the 2 formerly monetary metals relative prices.
"Gold and silver are forecasted to outshine" platinum and palladium as well as base metals such as copper and nickel, says the 2024 outlook from US financial-services giant J.P.Morgan, pointing to the US Federal Reserve's cuts to interest rates, plus "falling US real yields" as bond prices rally from the last 3 years' drop.
High interest rates aren't "favorable for zero-yielding assets such as silver," explains specialist consultancy Metals Focus in its final update of this year for the Silver Institute of miners, refiners and dealers. But the silver price in 2024 will also likely face "poor confidence in industrial commodities due to a slowing Chinese economy."
"Lower interest rates and a subsequently weaker US Dollar should support the silver price," agrees analysis for German bullion refiners Heraeus produced by SFA (Oxford). "However, interest rate cuts usually indicate an ailing economy [and] upside for [the] silver price [will] be tempered by [a] weak industrial outlook."
"The gold:silver ratio is above its long-term average," Heraeus' report goes on – suggesting that silver is under-valued – "but [the ratio] can move higher, as it has done in five of the last six US recessions as gold outperforms silver."
Chart of the gold price divided by the silver price. Source: BullionVault
2023 began with one Troy ounce of gold worth 75.7 ounces of silver, a ratio which has since risen to 84.0 as the 'safe haven' yellow metal gained 13.4% in Dollar terms but silver rose only 2.2% from last New Year's Eve.
Looking at "silver's recent activity", says bullion-market expert Rhona O'Connell – now at brokerage StoneX – "certainly suggests that for now, at least, [the market] is preferring to concentrate on gold rather than responding to the slowing in the US economy, the struggles in Europe and the comparatively anaemic recovery in China [where] 60% of silver’s fabrication demand is driven by industrial uses."
Further ahead, O'Connell adds, "it is important to remember that the outlook for the solar industry in particular is very strong and benefits silver, as does the electrification of the vehicle fleet, underpinning silver’s fundamentals for the longer-term."
2023 will have seen industrial demand for silver set a new all-time high, Metals Focus' managing director Philip Newman said earlier this month at the London Bullion Market Association's annual winter seminars.
J.P.Morgan, whose analysts have "the highest conviction on a bullish medium-term forecast for both gold and silver over the course of 2024 and into the first half of 2025," expects that "silver prices will likely follow gold" higher, rising to average "around $30/oz in the fourth quarter" of next year. 
SFA's forecast for silver expects the precious metal to trade in a range of $22 to $29 per Troy ounce. Should the Gold/Silver Ratio hold or rise above this year's average of 83.3 ounces of silver to 1 ounce of gold, that would price the dearer 'safe haven' metal at more than $2400.

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