In the latest report, Carsten Fritsch, a precious metals analyst at Commerzbank, stated that he remains optimistic about the silver trend in 2025, as the silver trend at the end of this year is consistent with the gold trend. The current gold-silver ratio is about 85, which is similar to the level at the beginning of the year, despite silver rising by 30% in 2024.

Fritsch stated: "In other words, silver is still cheap compared to gold."

Fritsch pointed out, "Like gold, silver is supported by interest rate cuts from central banks around the world and the prospect of further cuts. Although silver has high industrial value, it is also an investment metal."

Although silver prices have significantly dropped from last month's high of $35 per ounce, they are still expected to reach a 12-year high by the end of this year.

Fritsch pointed out that the Federal Reserve's easing cycle has supported market demand for gold investment while enhancing the investment attractiveness of silver this year, as evidenced by the net inflow of funds into silver ETFs. However, he also noted that the demand for physical gold and silver is currently hovering at a four-year low.

While investment demand for silver has improved in recent months, Fritsch emphasized that the main pillar supporting silver comes from its industrial demand, which is "continuously breaking records."

Specifically, the use of silver in photovoltaic solar panels remains an important and growing source of demand for this precious metal.

He said: "In the past three years, the demand for silver in photovoltaics has more than doubled, and now it is almost on par with the demand for silver bars and coins. The continuously growing industrial demand will ultimately ensure that the physical silver demand experiences a slight increase this year, reaching the second highest level since 2022."

Due to strong silver demand, the market expects a supply deficit in silver for the fourth consecutive year, with a potential supply deficit in 2025 supporting a long-term bullish outlook for silver prices.

He said: "We expect silver prices to rise to $32 per ounce by mid-next year and reach $33 by the end of 2025. Therefore, silver will gain some advantages relative to gold, considering our gold price forecast of $2,650 per ounce, and by the end of 2025, the gold-silver ratio will drop to 80."

Article forwarded from: Jin Ten Data