Bank of America is optimistic about the future of silver prices, expecting a rise in the second half of 2024 and into 2025. According to BofA Metal Strategist Michael Widmer, the average silver price is predicted to reach $35/oz by 2026, compared to the current spot price of $29.28/oz. This positive forecast is based on factors such as the expected end of central bank interest rate hikes and growing interest in precious metals.
Despite the recent strength in silver prices, Bank of America believes there is still room for growth. They anticipate a positive impact from the gold market, with gold prices forecasted to reach $3,000 per ounce by 2025. However, the report also notes the challenge of finding pure silver mining equities, as silver is often produced alongside other metals like lead or zinc.
Bank of America acknowledges the difficulty of obtaining ‘pure’ silver exposure through mining equity investments. They point out that even companies focused on silver mining may have less than half of their revenue coming from silver. Despite this, BofA recommends certain North American investments for those looking to gain exposure to silver. Pan American Silver and Wheaton Precious Metals are highlighted as Buy-rated equities.
Pan American Silver is praised for its strong balance sheet, potential for production growth, and diverse assets. Wheaton Precious Metals, a company specializing in precious metals royalties and streaming, is recognized for its significant silver revenue stream and industry-leading volume growth.
For global investors, Bank of America gives a Neutral rating to UK-based Fresnillo. While Fresnillo is popular for silver exposure, BofA raises concerns about potential challenges at the company’s mines and limited growth opportunities.
Overall, Bank of America’s forecast for silver prices in 2024 and beyond is positive, with expectations of growth driven by various factors in the market. Investors are advised to consider the recommendations provided by BofA when seeking exposure to silver in their portfolios.