Robust investment and industrial demand fuel silver prices to surge to all-time high

According to reports, while Exchange Traded Funds (ETFs) have shown limited interest, physical sales of silver have increased, reflecting its perceived undervaluation.

Earlier in January, the gold-to-silver ratio surpassed 90, the widest gap since September 2022.

However, it has since narrowed to around 80 and is expected to further drop to 70 if the Federal Reserve cuts rates and the US economy remains resilient.

As per reports, silver also benefits from its critical role in solar panel production, expected to reach a record high in 2024, pushing the silver market into its fourth consecutive deficit.

According to the Silver Institute, the global silver deficit is projected to rise by 17 percent to 215.3 million troy ounces this year, driven by a 2 percent increase in demand, led by strong industrial consumption, and a 1 percent drop in total supply.

Global supply of silver has remained steady at approximately 1 billion ounces, while industrial demand witnessed an impressive 11 percent growth.

Stocks held in commodity exchange depositories and London vaults dropped by 5 percent last year, amounting to nearly 15 months of global supply at the end of 2023.

From a technical perspective, the market is experiencing short covering, as indicated by a 4.39 percent fall in open interest, settling at 30148 while prices increased by Rs 4243, reports said.

Silver currently has support at 92760, with potential testing at 90250 if it drops below this level, while resistance is anticipated at 96630, with a move above possibly pushing prices to 97990, according to reports.