Bullish on Silver for the next 12 to 18 months:
Emkay Wealth Management
- The
medium term as well as long term factors indicate a positive outlook for
silver
- Adoption
of EVs and green energy tech to push demand for silver
Mumbai, March 6th , 2025: Emkay Wealth Management Ltd, the
wealth management arm of Emkay Global Financial Services has released a press
note on silver. Prices of silver in INR terms, have moved up by 15% in CY24 and
YTD 2025 the prices are up by another 11%. A confluence of factors such as
falling US interest rates, geopolitical situation and uncertainties surrounding
Trump policies have been supportive of precious metals. Going ahead silver
prices are expected to be well supported.
Fundamental Factors
The medium term as well as long term factors
indicate a positive outlook for silver. The US interest rates are expected to
follow a downward trajectory for 2025, albeit at a gradual pace. Over the near
to medium term interest rates are a critical determinant of demand for precious
metals. The geopolitical situation is expected to remain fluid over the near
term and the trade policies of Trump administration are expected to encourage
safe haven demand.
The long term outlook of a commodity is determined
by the demand-supply scenario. The supply of silver has been in deficit over the
last four years. The supply for CY24 is estimated at 1,004 million ounces
whereas demand is estimated at 1,219 million ounces. The majority of this
demand (~60%) comes from industrial uses. Silver finds extensive applications
in electronic devices, circuit boards, solar panels and electric vehicle
batteries. As the adoption of EVs and green energy technologies continues to
gain traction, the industrial demand for silver is expected to remain robust.
Source: silverinstitute.org
Technical Factors
Silver is showing signs of relatively higher
momentum with the price trying to breach the crucial US$ 33 level. With a
variety of industrial uses silver is expected to have a better run moving
higher from the current level, to US$ 36.60, US$ 38.70, and US$ 39.30.
Investing in silver funds with a 12 to 18 months’ time horizon is likely to be
a worthy proposition.
The second technical factor of import is the gold-silver ratio. At current prices, the gold-silver ratio is hovering around the 90 mark, indicating a relative cheapness in silver prices. If the ratio is to go back to its long term range of 50 to 70, it translates into strengthening silver prices over the medium term.
