Silver Almost Keeps Pace with Gold in 2024: Key Trends and Insights

As 2024 draws to a close, silver has emerged as a standout performer in the precious metals market. Although gold has performed slightly better so far (+27.8% YTD), silver benefits from its dual role as both an industrial and investment asset. This article delves into the key drivers of silver’s performance this year and explores how ETFs like the iShares Physical Silver ETC (ISLN) provide investors with a gateway to its growth potential.

Silver’s Exceptional Performance in 2024

Silver has jumped 24.4% so far in 2024, nearly matching gold’s performance as of December 27. After rebounding from a three-month low of $29 per ounce on December 19, silver ended the week at $29.61. This rebound was driven by macroeconomic factors, rising industrial demand, and indirect support from aggressive central bank gold purchases. These drivers could support silver’s continued upward momentum in 2025.

Industrial Demand and Structural Deficits

Unlike gold, approximately 55% of silver’s demand comes from industrial applications. In 2024, this demand surged, fueled by the growth in the electronics and renewable energy sectors, particularly photovoltaic (solar) technologies. Solar energy alone now accounts for nearly 20% of industrial silver consumption, highlighting the global shift toward sustainable infrastructure. This heightened demand has led to physical tightness in the silver market, resulting in a supply deficit for the fourth consecutive year, according to the Silver Institute (source: https://silverinstitute.org/).

Miners continue to face significant challenges in discovering new silver deposits, further exacerbating the structural supply deficit. This combination of robust industrial demand and constrained supply positions silver as a compelling candidate to outperform gold in the years ahead, especially as global interest in renewable energy continues to grow.

Investing in Silver Through ETFs

The iShares Physical Silver ETC (ISLN) is a notable option, designed to track the performance of the spot price of silver. By holding physically backed silver assets, ISLN allows investors to gain direct exposure to silver’s price movements without the complexities of owning the metal outright.

In 2024, ISLN benefited from silver’s strong performance, reflecting the metal’s gains while offering liquidity and ease of access. ISLN gained 2.99% this week, bringing its year-to-date performance to +31.68%. The fund also managed to attract nearly €330 million in inflows over the course of the year.

Outlook for 2025

As 2025 approaches, silver’s fundamentals suggest continued strength. Robust industrial demand, tight supply conditions, and its dual role as both an investment and industrial asset create a favorable environment for sustained growth. Coupled with the accessibility of ETFs like ISLN, silver remains an appealing choice for investors looking to diversify their portfolios and capitalize on the ongoing momentum in the precious metals market.

Here’s a comparison between Silver ETFs

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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.