The global silver deficit is expected to fall by 4% to 182 million ounces in 2024, with growth of 2% in total supply offsetting demand growth of 1%, the Silver Institute industry association said on Wednesday. Silver, used in jewellery, electronics, electric vehicles and solar panels as well as an investment, faces the fourth year of a structural market deficit, the Silver Institute said in a review prepared with consultancy Metals Focus. By Reuters

In Q2’24, dare it be written, All-In Sustaining Costs (AISC) rose again, creeping up by 1% q/q, or a more substantial 6% y/y to US$1,388/oz. In some ways, the onward march of AISC in the last couple of years is reminiscent of hill-walking; just when you think you’ve reached the top, there’s always that little bit more hill to climb. And yet, in Q2’24, it isn’t just the usual suspects driving this growth. by Sarah Tomlinson

The second in our series of precious metals market snapshots from the team at Metals Focus looks at the silver market. Be sure to come back next week for analysis on platinum. From the publication of the last Investment Focus from Metals Focus in October 2023 and through to February, silver prices languished, trading largely rangebound in the low $20s. However, silver has since staged an impressive rally, rising by more than a third from the start of this year to a 12-year high of $32.52 in May. By Stuart Fieldhouse for the armchair trader

Gold’s meteoric rise to $2,740.37 per troy ounce reflects growing geopolitical tensions and economic shifts. Metals Focus attributes the increased demand to uncertainties surrounding the US electoral race and broader macroeconomic issues. The outlook remains optimistic, with forecasts of gold reaching $2,800 by year-end, supported by expected global interest rate cuts. By Finimize Newsroom

“The need for portfolio diversification has continued to drive investment inflows into gold, whether investors base their views on ever rising U.S. public debt in the long term, systemic risks in global financial markets or possible corrections in richly priced equities,” consultancy Metals Focus said. By Polina Devitt and Swati Verma for Reuters

If Trump wins, the potential for tariff hikes—and the associated effects on future inflation—and further geopolitical uncertainties could provide an additional boost to gold investment. That said, both Trump and Harris’s policies will see U.S. debt rise, albeit more under Trump, according to an independent analysis, the Metals Focus team said. by The Wall Street Journal

Some of the recent strong gains in gold initially appear counter-intuitive, given the European Central Bank interest rate cut and boost to the dollar, according to Philip Newman, managing director of Metals Focus. The price of gold, which pays no interest, tends to rise when interest rates are cut. By Sian Bradley for The Times

The Silver Institute’s latest World Silver Survey, put together by Metals Focus, outlines a 1 percent decrease in global mine production to 830.5 million ounces in 2023. This was in large part the result of a four month suspension of operations at Newmont’s (TSX:NGT,NYSE:NEM) Peñasquito mine in Mexico due to strike action among workers. By Melissa Pistilli for Investing News Network

“The impact of the duty cut was unprecedented, it was incredible,” said Philip Newman, managing director of Metals Focus in London. “It really brought consumers in.” The tariff cut has been a boon for Indian jewellery stores such as MK Jewels in the upmarket Mumbai suburb of Bandra West, where director Ram Raimalani said “demand has been fantastic”. By Leslie Hook for the Financial Times

Does this ballooning deficit pressure mean that silver prices are about to head to the heavens? Not necessarily. “Identifiable silver inventories, as well as metal held off exchange, remain sizable,” according to Philip Newman, managing director at consultancy Metals Focus, which produced the “World Silver Survey” for the Silver Institute. “However, some of this silver may be tightly held, so it will be interesting to see, going forward, what impact ongoing deficits have on the market.” By Alexander Jones for International Banker

Import duty differentials between gold bullion bars and semi-refined doré had already been equalized by the New Delhi government after a failed attempt to boost India’s domestic bullion refining industry saw huge over-capacity in the late-2010s. But doré still accounted for nearly 28% of gross bullion inflows in 2021-2023 on Metals Focus’ data for the World Gold Council, up from less than 5% in 2012-2014. By BullionVault

However, strong economic data has not been the only driver of gold prices in recent weeks.“[The gold price] certainly wasn’t hurt by political events in the US over the weekend,” Neil Meader, director of gold and silver at Metals Focus, an independent metals consultancy in London, said. “It does sort of just add to that atmosphere of insecurity and uncertainty.” By Tom Saunders for The Times

“Given the significant deficit, above-ground stocks have declined to their lowest levels in our records (dating back to 1980) this year, with further deficits expected in 2024 and 2025” said Wilma Swarts, head of platinum group metals research at consultancy Metals Focus. “This will further tighten liquidity and is likely to lift or support prices this year,” she added. By Polina Devitt, Pratima Desai and Arpan Varghese for Reuters

Indeed, in late October 2023, Metals Focus, a consultancy focused on precious metals, notified investors that AI technology’s growing popularity and proliferation will likely lead to a substantial increase in the price of the world’s foremost commodity. The prediction has, apparently, come true, given that gold was priced at about $1,800 per ounce late last year and rose above $2,300 just months later. By Andreja Stojanovic for Finbold

Philip Newman, managing director of Metals Focus, an independent precious metals consultancy, said: “You’ve got that element of safe haven out there and with the Middle East, from a big picture point of view, this has brought Iran back into focus.” By Tom Saunders for The Times

In 2024, the silver deficit will be the second highest on record behind 2022 as industrial demand reaches a new high, according to the Silver Institute’s latest World Silver Survey. “Robust gains from PV applications and a decent performance in other segments are expected to see industrial demand reach a new all-time record,” says Metals Focus, producer of the latest Silver Survey. “Crucially, supply will remain little changed, with a marginal decline forecast for 2024. This will lead to a 17 per cent rise in the market deficit to the second-highest on record.” By Stockhead