Since the beginning of this year, the international silver price has seen a significant rise, welcoming a "silver bull" market. Last Friday (October 18th), the international spot silver price broke through the $33 per ounce mark, setting a new high in nearly 12 years. As of the drafting on October 22nd, spot silver rose by 1.90% to $34.41 per ounce, hitting a new high, and the daily chart formed a "six-day winning streak" trend.

Looking at the cumulative price increases from the beginning of the year, both spot silver and COMEX silver have risen by over 40%, outperforming the same period of spot gold and COMEX gold.

Structural supply shortages have appeared in silver.

In recent years, looking at the global silver supply and demand trends, according to data from the Silver Institute, the total global demand for silver in 2023 is 35,551 tons, with a silver shortfall of around 4,400 tons. In 2024, driven by the recovery of mineral silver production, the total global silver supply is expected to increase by 2%-3%, reaching over 31,700 tons; total silver demand is expected to increase by 1%, reaching over 36,700 tons; the supply-demand gap is still expected to remain high, at around 5,000 tons.

It is worth noting in terms of demand, according to a research report from Huaxi Securities, the continuous increase in the use of silver in photovoltaics will lead to a sustained tightening of the silver supply-demand situation. Silver, as the best conductive metal, plays an irreplaceable role in the photovoltaic industry, mainly as the front and back silver of solar cells. From 2011 to 2019, the compound growth rate of silver used in photovoltaics globally was 15%, with the silver demand in photovoltaic applications reaching 6,018.5 tons in 2023, accounting for 16.19% of total silver demand, and the continuous growth of silver consumption in photovoltaics continues to widen the silver supply-demand gap.

Regarding the recent trend in silver prices, Huaxi Securities stated that silver has started a rising trend, with a cumulative 9.9% increase in September outperforming gold, and in October, silver once again outperformed gold. Due to silver's industrial and safe-haven attributes and its four consecutive years of structural supply shortages leading to continuous reduction in inventory, the follow-up rising trend may continue.

Goldman Sachs, Citigroup, and UBS Group are all bullish on future trends.

Regarding the future trend of silver prices, several overseas institutions have recently published forecasting views.

Goldman Sachs believes that going long on silver is one of the best trades in the current market. Firstly, compared to gold, silver has lower holdings and significant room for catching up. Secondly, silver is a key component in the development of Artificial Intelligence (AI), and its trend is highly correlated with AI leader NVIDIA. The demand for industrial and eco-friendly metals provides strong support for this precious metal silver.

Recently, Citigroup raised its forecast for the future 6 to 12 months silver price to $40 per ounce, previously forecasted at $38 per ounce.

UBS Group precious metals strategist Joni Teves estimates that the target price for silver by the end of 2024 will be $36 per ounce, rising to $40 per ounce in 2025. From a fundamental perspective, the silver market will continue to be in short supply. In an environment where gold prices are rising and the Federal Reserve is easing policies, silver's performance is likely to outshine gold.

This article is reprinted from WindStocks, edited by Zhixun Finance: Chen Wenfang.