Motilal Oswal Financial Services has forecasted a bullish outlook for silver, predicting domestic prices to soar to Rs 1,25,000 within the next 12-15 months. Despite silver’s recent gains of over 30%, analysts are advising investors to take advantage of significant price dips that may occur.
Key support levels for silver have been identified near Rs 86,000-86,500, indicating a strong foundation for further growth. The upward revision of price targets is a result of strong demand fueled by geopolitical tensions and economic uncertainties.
The influence of central banks and monetary policy on silver prices is evident, with the U.S. Federal Reserve maintaining a cautious stance amidst easing inflation pressures. Despite current market expectations for a rate cut in September 2024, uncertainty surrounding monetary policy direction continues to impact precious metals.
China’s position as a major consumer and producer of industrial metals plays a significant role in global silver markets. Despite economic challenges, potential stimulus measures by the People’s Bank of China and robust imports suggest market stability. Geopolitical tensions, including the upcoming U.S. elections and conflicts in the Middle East, are further boosting silver’s safe-haven appeal.
With demand for silver expected to experience modest growth in 2024 driven by industrial applications, supply constraints persist due to mining challenges. Market deficits are projected for the fourth consecutive year, with demand outpacing supply. Manav Modi, Senior Analyst at Motilal Oswal Financial Services, highlighted a predicted decrease in total supply by approximately 1% from 2023 to 2024.
Overall, the future outlook for silver remains positive, with market dynamics indicating a potential price surge in the coming months. Silver has shown strong performance this year, outperforming gold amidst market volatility. With domestic silver imports on the rise and continued geopolitical tensions, the precious metal continues to be a lucrative investment option for investors.
