CITIC Construction Investment: Silver is expected to enter a new round of bull market

According to Jinshi, a research report by CITIC Securities pointed out that silver has both financial and commodity attributes, and the current macro and commodity attributes are resonating upward. The Fed's interest rate cuts have led to a downward real interest rate, a weakening of the US dollar credit system, and geopolitical factors constitute the upward driving force for precious metal prices. The current gold and copper prices have hit record highs, while silver, which is also denominated in US dollars, is still at the 60% percentile of its historical high, opening up the imagination space for silver prices.

The gold-silver ratio is at a high level, and a downward revision of the ratio will promote greater upward elasticity for silver. At the same time, silver demand is good, industrial demand is strong, and demand in the photovoltaic silver paste field is growing rapidly. It is expected that the growth rate of silver demand will be 2.0% in 2024; but it is difficult to form an increase on the supply side. The supply CAGR in the past decade has been negative. It is expected that the supply will continue to decline by 0.7% in 2024. Silver is expected to be in short supply for four consecutive years, and the gap will be larger than in 2023.