After hitting a high of just over $20 per ounce in 2016, silver put on a more subdued performance in 2017. 

Silver had not breached the $20 mark as of the end of November, and had averaged $17.13 as of midway through that month. Analysts at Thomson Reuters GFMS see the silver price maintaining its $17.13 average through 2017, on par with its 2016 annual average of $17.14.

The white metal traded within a range of about $3 in 2017, recovering to over $18 at the start of 2017 before hitting a 15-month low of $15.19 in July. It rallied back to about $18 in early September and then sunk back down to the $16.50 level the next monthAccording to FocusEconomics, the price fall in October was due to stronger performance from US equity indexes, which reduced demand for silver

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Silver’s price performance from January 1, 2017 to November 29, 2017. Chart via Kitco

The silver price gained some ground in early November on the back of developments in the US, including “recent news on the job market [that] was slightly downbeat, and the announcement of President Trump’s Federal Reserve chair nominee, [which] resulted in a weaker dollar.” FocusEconomics notes that the president’s proposed tax plan “is likely to deteriorate the nation’s fiscal standing,” and says that ongoing geopolitical tensions with North Korea will drive demand for safe-haven assets like silver.

As of November 29, the silver price was up 3.46 percent year-to-date, changing hands at about $16.50.

Silver trends 2017: Supply

The silver market is expected to reach a small annual physical surplus of 32.2 million ounces in 2017 after four consecutive years of physical shortfalls, according to Thomson Reuters GFMS’ interim silver market review, released on November 15.

Total silver supply is forecast to remain flat in 2017 at 1,008.4 million ounces, the firm says. Metals Focus gives a similar estimate of 1,024 million ounces for total silver supply for 2017. Global mine production is expected to clock in at 869.7 million ounces in 2017, which represents a year-on-year drop of 2 percent, due to declines in Chile and Australia. Before 2016, silver mine output had not dropped for 14 years.

Despite high levels of silver production overall, one of the largest primary silver mines experienced a disruption in 2017. Guatemala’s Supreme Court suspended the operating license for Tahoe Resources’ (TSX:THO,NYSE:TAHO) Escobal mine, halting operations between July and September.

Higher scrap supply and a drop in net dehedging are expected to offset lower mine production in 2017. After five years of declines, scrap supply is expected to rise to 141.6 million ounces, up 1 percent year-on-year, driven by higher Asian flows. The rise is reportedly also partly due to firmer industrial fabrication demand, which is generating higher volumes of fabrication waste.

Companies in the silver space continue to be optimistic about the market. Wheaton Precious Metals (TSX:WPM,NYSE:WPM) President and CEO Randy Smallwood