ASX Silver Stocks to Watch After Citi’s Bullish US$38/oz Silver Price Prediction Silver prices have been on the rise, with major broker Citi predicting significant gains. The brokerage is confident about the future of silver, citing several factors that suggest further price increases. As the global economic landscape shifts, many believe silver is about to experience a momentous period.
Citi’s Bold Silver Forecast
Citi’s latest commodities report outlines a bullish outlook for silver. Currently priced at US$31.20/oz, Citi expects it to rise to US$35/oz by the end of 2024, and to US$38/oz within 6–12 months. This implies a short-term upside of around 12% and a potential 22% gain in the medium term. The report also points out that silver, long overshadowed by gold, is now set to become a star performer in the commodities space.
Key Drivers Behind the Silver Surge
Citi’s optimism is based on several crucial factors:
China’s Energy Transition
China’s aggressive green energy shift is a key factor driving silver demand. Silver is a crucial component in solar panels, a technology China has prioritised. As the country continues its renewable energy investments, the demand for silver is expected to rise.
Chinese Investment in Silver
With the Chinese property market struggling, investors are turning to silver as a store of value. Silver, alongside gold, has become an alternative investment to real estate, attracting strong demand from Chinese investors.
Supply Deficits in the Silver Market
Citi notes a substantial deficit in the silver market, with demand outpacing supply by as much as 20% of total global consumption. Only a small percentage of silver stockholders are willing to sell, and even then, they are likely to offload at higher prices. This imbalance between demand and supply is expected to push prices upward.
The Fed’s Interest Rate Cutting Cycle
Lower interest rates are generally beneficial for precious metals like silver. As these assets do not yield, their opportunity cost declines when interest rates fall. Additionally, fears of currency debasement during central bank stimulus periods could further boost demand for silver. Citi expects an increase in Exchange Traded Fund (ETF) and fund futures buying in the coming months.
Gold Still Shines, But Silver’s Potential Outshines It
Citi remains bullish on gold but emphasises silver’s higher upside potential. While gold is expected to trade between US$2,800 and US$3,000/oz in the next year (offering around 7-15% upside), silver’s forecasted gains are more pronounced. Silver, traditionally considered secondary to gold, is poised for a breakout, with its price movements expected to outpace gold’s.
ASX Silver Stocks to Watch
Several ASX-listed companies are well-positioned to benefit from the anticipated rise in silver prices.
Adriatic Metals
Adriatic Metals is one of the prominent players in the sector, with a market capitalisation of $937 million. The company operates the Vares Silver Project in Bosnia and Herzegovina, where production commenced in February 2024. Adriatic is ramping up production to reach a capacity of 65,000 tonnes per month by the final quarter of this year. With its solid production base, Adriatic Metals could stand to benefit significantly from the upcoming silver price surge.
Argent Minerals
Argent Minerals is another ASX-listed silver stock worth noting. With a market capitalisation of $25.5 million, Argent is focused on the Kempfield Project in New South Wales. Currently at the exploration stage, the project holds significant promise with indicated and inferred resources amounting to 127.5 million ounces of silver equivalent. The company is actively working to expand its mineralised footprint through ongoing drilling programs.
Andean Silver
Andean Silver, which has a market capitalisation of $136 million, is advancing the Cerro Bayo Project in Chile. The project is currently in the exploration phase, but given its historical gold and silver production, the company has substantial infrastructure already in place. Andean Silver is conducting resource drilling and has plans for geophysical surveys and hyperspectral mapping, with a target completion by the second quarter of 2025.
Sun Silver
Sun Silver, with a market capitalisation of $50.5 million, operates the Maverick Springs Silver Project in Nevada, USA. Like its peers, Sun Silver is also in the exploration phase. The company is focused on expansion exploration drilling and metallurgical test work, with inferred mineral resources amounting to 253 million ounces of silver and 2 million ounces of gold.
Also read: Calima Energy Announces Plan to Delist from ASX
Unico Silver
Unico Silver is another ASX silver company that could benefit from rising prices. With a market capitalisation of $72 million, Unico is advancing the Cerro Leon and Joaquin Silver District projects in Argentina. The company has scheduled drilling at Cerro Leon for September 2024, and an updated mineral resource estimate for Joaquin is expected by the first half of 2025. Combined, the two projects offer over 160 million ounces of silver equivalent, positioning Unico as a key player in the silver exploration space.
Conclusion
Citi’s high-conviction silver forecast signals a bright future for the precious metal. The combination of China’s energy transition, supply deficits, and favourable interest rate conditions suggests silver is set to outperform in the coming months. Investors looking to capitalise on this trend should closely monitor ASX-listed silver companies like Adriatic Metals, Argent Minerals, Andean Silver, Sun Silver, and Unico Silver. As silver prices rise, these stocks are likely to offer significant upside potential.
