Silver prices currently trade at the lower end of the recent range at about $17.50/oz, having touched a 12-month high of $19.31 in August and a low of $14.38 in May.

In its 2020 market outlook, the institute said the precious metal experienced a notable improvement in investor sentiment in 2019, boosting the average annual price to its first increase in four years, up 4% to $16.21. Underpinning the price rise was a marked shift towards looser monetary policies, as concerns grew about the global economic outlook, exacerbated by the ongoing US-China trade war.

These macroeconomic and geopolitical uncertainties across critical economies were underpinning gold's price performance to date, however, ongoing concern about the global economy will have possible negative consequences for the industrial metals, and by extension, silver.

The weight of institutional money flowing into a relatively small market should prove sufficient for silver to outperform gold and could cause the gold:silver ratio to drop to the mid to high-70s later this year.

The Silver Institute believes macroeconomic and geopolitical conditions will remain broadly supportive for precious metals, encouraging investors to stay net buyers of silver overall, a development that should lift silver prices higher this year, according to the report. "However, there will be times when silver will have to contend with issues, such as the current health crisis in China, which could hit that country's economy hard."

The report expects mine supply to grow by 2% this year.

Growth in silver industrial offtake, accounting for just over half of total demand in 2019, is expected to resume at 3% in 2020, reversing two years of marginal losses. Weak economic conditions in China remain a headwind to industrial output.

In total, the silver market should see a surplus of 15 million ounces, "the lowest in five years".