Silver performance at the end of 2023 and significant news affecting its price
• Silver News December 2023 reports that global demand for silver rose 8% to 1,033 million troy ounces, while supply fell 4% to 978 million ounces. That means the silver market posted a deficit of 55 million ounces. The main factors driving demand were rising investment in silver coins and bullion, increased consumption in industries such as solar, electronics and biocides, and higher consumption of jewelery and silverware.
• According to Silver News Headlines Today, the price of silver ranged between $22.50 and $24.50 per ounce in December 2023, influenced by geopolitical tensions in the Middle East, expectations of the US Federal Reserve's monetary policy and the weakness of the US dollar. Some analysts have predicted that the price of silver could rise to as high as $35 an ounce in 2024 if inflation picks up and supply remains tight. Silver closed the first week of 2024 with a decrease of approx. 3%.
• Silver outperformed gold in 2023 as it posted an annual gain of 14% compared to gold's only 4%. According to CNBC, the reason was higher industrial demand for silver, which accounts for about 60% of total demand, compared to only 10% for gold. Silver also benefited from a lower price compared to gold, making it more attractive to small investors.
• According to Money Metals, several new silver deposits were discovered in 2023, which could increase supply in the future. These include the Silver Sand project in Bolivia, which has the potential to become one of the world's largest silver resources, the Silver Elephant project in Mexico, which has an estimated reserve of 200 million ounces of silver, and the Silver King project in Australia, which has an estimated reserve of 100 million ounces silver. However, these projects are still in the exploration or development phase and could take several years to reach commercial production.
Central banks started buying silver for their reserves in 2023:
• The People's Bank of China (PBOC) announced the addition of 103 tonnes of silver in the first half of 2023, bringing its total stockpile to 2,113 tonnes. The PBOC does not report silver stocks regularly, however some sources estimate the 2019 PBOC silver stocks at 1,900 tonnes. Which means a significant increase in silver reserves in 2023.
• Singapore added 73 tonnes of silver to its reserves in the first half of 2023, bringing total reserves to 126 tonnes. This represents a whopping 143% increase in silver reserves!
• Poland (NBP) added 48 tonnes of silver, bringing the stock to 249 tonnes.
• Russia (CBR) said it added 31 tonnes in the first half of 2023, bringing inventories to 1,066 tonnes to reduce reliance on the US dollar.
• India (Reserve Bank of India RBI) announced the addition of 2.8 tonnes of silver in the first half of 2023. The RBI started buying silver just in January 2023.