Silver Price Plunge Doesn't Break Bull Case, Say Silver Institute and Citi

Silver's price has plummeted by nearly 50% from its January high of $121 an ounce to around $65. Despite this significant drop, two prominent market voices are warning investors not to misread the situation.

The Silver Institute and Citi have both maintained their bullish views on silver, with Citi sticking to its forecasts of $75 an ounce in three months and $90 over the next six to 12 months. According to Michael DiRienzo, president and CEO of the Silver Institute, the market has established new price floors far above those of the previous decade.

The underlying silver market remains strong, driven by industrial demand. Solar manufacturers are reducing silver use, but alternative materials face obstacles to scaling up. Silver's electrical conductivity and maturity in screen-printing make it a reliable process for artificial intelligence data centers.

Supply is slow to respond due to cautious producers and limited free float, with about 75% of silver held in London vaults already allocated to exchange-traded products. The institute expects mine production to fall 0.3% this year, while recycled supply rises about 7%, not enough to close the gap.