Silver Will Have a Promising Year in 2023

The Silver Institute announced that in 2023, mining production will increase by 5%, largely due to Mexico’s production. In addition, silver prices will benefit from higher demand and fears of recession, which increases the purchase of silver as a traditional safe haven investment.

The Institute announced that the expected production for 2023 is 1.055 billion oz. "Production from silver mines is expected to increase 5 percent in 2023, the highest level since 2016. This growth will come largely from new silver mines in Mexico increasing production along with higher by-product production from Chile due to new gold operations with high silver content."

Metals Focus stressed that the rise in silver recycling will slow down, as it may increase by 3 percent to reach the decade’s maximum level. "Lower emergency sales will result in a reduction in the supply of waste jewelry and silverware. All other categories are projected to have lower volumes," said Silver Institute’s report.

According to Metal Focus, rising prices for gold and other base metals in 2023 have favored silver. The current average price of silver is 8% higher than in 2022. "This year, we have a cautious outlook for the silver price. This is based on our view that even if the pace of interest rate increases by the US slows, increases will continue through the middle of this year and potential rate cuts will be marginal."

The Silver Institute expects inflation to decline in 2023, leading to higher interest rates that will impact the demand for silver and other precious metals. Recession concerns, which normally encourage investors to take higher risks, may be an opportunity for silver.

Previously, the Silver Institute detected some challenges the industry will face in 2023 such as Exchange-Traded Products (ETPs), forecasted to experience the largest annual decline in holdings of 110Moz owing to silver volatility. The institute highlighted that institutional investors could keep a bearish stance as real yields are likely to strengthen.

Michael DiRienzo, Executive Director, The Silver Institute told MBN that while the industry should wait to see what 2023 brings, one thing is for sure: silver will have a promising year. “At the recent London Bullion Market Association conference, delegates were asked to forecast the precious metals prices one year into the future. Silver had the best forecast at US$28.30, a 54 percent increase over the price at the time of the conference held this October. That is quite optimistic but reflective of silver's dual role as a precious and industrial metal.”