Silver Price Forecast for Q4 2024: Another Rise on the Horizon

Key factors driving silver demand in the fourth quarter of 2024

Growing demand from industry and green energy

Silver will benefit significantly from its dual role as an industrial and precious metal in the fourth quarter of 2024. One of the main drivers of this increased demand is the rapid growth of the green energy sector. This sector relies heavily on silver, which provides high electrical conductivity and durability. The surge in renewable energy initiatives has created a solid demand base for silver. Moreover, silver’s role in battery production and electric vehicle charging infrastructure will strengthen its position as a critical resource. If industrial production rebounds and supply chains stabilize, increased demand from these sectors could be a key force driving silver prices higher in Q4 2024.

Central bank policy and currency dynamics

Beginning in the fourth quarter of 2024, the Federal Reserve is expected to continue its interest rate cut cycles. This action is a response to the slowdown in economic growth and the increased risk of recession. Dovish monetary policy is exacerbated by the weakening US dollar. The US dollar began a short-term rebound. However, this rebound is likely to be limited by technical resistance as the overall US dollar trend remains down. This supports the price of silver due to its inverse correlation with the dollar.

This dynamic attracts the interest of speculators and increases the attractiveness of silver as a hedge against currency devaluation. Additionally, as industrial activity increases, China’s ongoing stimulus measures will increase demand for silver. These monetary and currency factors create a favorable backdrop for silver. These factors make silver an attractive investment choice in the fourth quarter of 2024.

Supply constraints and market sentiment

While demand dynamics play a key role, supply factors are equally important to the silver market outlook. In 2024, global silver mining production experienced a marginal decline due to several operational challenges. This reduction in supply combined with rising industrial demand sets the stage for a potential supply deficit. Market sentiment also plays a role, as lower mining production increases perceptions of scarcity. This dynamic is pushing investors towards silver as a safe-haven asset.

Moreover, the gold-silver ratio (XAU-XAG) is declining from long-term resistance. Historically, a decline in this indicator signals a period of silver outperformance, indicating that investors are shifting their preferences toward silver in anticipation of stronger price growth. The long-term continuation of this decline suggests further growth in silver prices. Overall, these supply constraints and favorable market sentiment will likely result in silver strengthening in the fourth quarter of 2024.