Silver EFPs: The Canary in the Mine
Breaking Down BOA's Latest Silver Report
“Shifting just 1% of global reserve assets into silver would be equivalent to 5 years’ worth of silver supply.”
-BOA Metals
Silver EFPs: The Canary in the Mine
Contents (1900 words, 14 slides)
Overview: Silver Market Dynamics and Prospects
Resilience Amid Macro Headwinds
**Tariff Risks Mean Higher Price Risk
**The EFP: Canary in the Silver Mine
**India and China Premiums Persist
**Global Central Banks as Silver Buyers
Supply Constraints and Production Trends
Conclusion and Comments
Overview: Silver Market Dynamics and Prospects
On January 15th Bank of America released a special report titled Silver won’t lose its luster long-term covering Silver from the perspective of upside risk due to ongoing developments potentially coming to a head. We had already covered the Tariff and ETF risk in SILVER: Tariffs, EFPs, and Stockouts and were pleasantly surprised when a major Bullion bank took up the topic only days after our coverage.
Their report provides a comprehensive exploration of the silver market, dissecting near-term headwinds (Macro), structural fundamentals (BRICS demand), and potential shifts in demand dynamics ( Tariff/EFP risks).
This analysis underscores the metal’s resilience despite significant macroeconomic challenges, examining supply deficits, industrial demand, and the interplay of recent escalating geopolitical and regulatory factors in this regard.
Resilience Amid Macro Headwinds
Silver prices have remained steady at approximately $30 per ounce over the past nine months, defying macroeconomic pressures such as a strong U.S. dollar, rising Bond yields and weakening industrial activity.
BOA attributes this stability to persistent supply deficits, exacerbated by underinvestment during prior bear markets. Global production is forecasted at 27Kt for 2024, still well below the 2016 peak by 1Kt.