Although recent market fluctuations have caused silver prices to fall below $30 per ounce, many analysts are not prepared to give up investing in this precious metal, such as Bank of America, which sees its strong potential for the future.
Recently, Michael Widmer, a precious metals strategist at Bank of America, predicts that silver prices will rise to $35 per ounce within the next two years.
As of now, the latest trading price for July silver futures is $29.552 per ounce, which has fallen from its previous high. However, the target price given by Bank of America shows that silver prices are expected to have more than 18% room for increase.
For the current price trend of silver, some analysts point out that in the short term, even in the current correction, silver futures prices are still managed to support above the upward trend of the 50 day moving average.
The upward trend has just begun
In the past few years, investors have been constantly seeking to hedge against geopolitical risks, and gold has always been the preferred safe haven asset. However, Bank of America expects that silver's recent performance in the precious metals sector has just begun, and now it is time for silver to shine brightly.
Bank of America strategist Widmer said, "Due to previous weak industrial demand, silver's performance was inferior to gold. However, as the global economy turns around, the performance of this metal should begin to improve. It is expected that the next generation of solar panels with higher silver content will become increasingly popular, and other support will continue to emerge."
Widmer also stated that silver has indeed experienced a surge before, but he is still optimistic about the second half of 2024 and 2025.
According to the latest silver report released by Bank of America, "All of this may attract more investors to enter the market, forming a virtuous cycle of pushing up prices."
In this environment, the bank confirmed its buy rating for silver stocks, offering two major silver stock options: Pan American Silver, headquartered in Canada, and Wharton Precious Metals.
However, Bank of America pointed out that although silver has great potential as an industrial metal, investment demand must rebound in order for silver prices to take off.
Lawson Winder, a research analyst at Bank of America and lead author of the latest silver report, said, "We acknowledge that silver prices have not seen a decisive increase recently. One of the reasons is weak investor demand. We see a lack of interest in physically supported ETFs in the market, which is also reflected in the net non commercial positions of the Chicago Mercantile Exchange (CME), trading volume on the Shanghai Gold Exchange/Shanghai Futures Exchange, and purchases of US metal coins."
Winder added, "However, we have also noticed encouraging signs of commercial demand for silver, which may ultimately attract investors and strengthen our constructive view on metal prices in 2024."