Silver Market to Remain Deficit for Fifth Consecutive Year in 2025 by Amit Gupta, Kedia Advisory
The silver market is set to experience its fifth consecutive year of deficit in 2025, with industrial demand remaining the main driver of this supply-demand imbalance. Silver prices have benefitted from geopolitical uncertainties and tariff concerns under President Trump’s administration, leading to short covering and rising deliveries into CME warehouses. While silver investment faces challenges from concerns over the Chinese economy, industrial demand in sectors like photovoltaics, automotive, and electronics is projected to remain strong. Despite potential headwinds, the market's supply remains tight, with forecasted mine production and recycling growth. The overall market remains poised for a continued deficit.
Key Highlights
* Silver market forecast to be in deficit for fifth year.
* Industrial demand and investment are expected to grow in 2025.
* Geopolitical uncertainties and tariffs support silver price recovery.
* Jewelry and silverware demand are set to decline.
* Silver supply to rise by 3% with significant mine production growth.
Silver prices have been trending higher since the start of 2025, fueled by concerns over geopolitical risks, particularly around President Trump's tariff policies. This has led to short covering and deliveries of silver into CME warehouses. Despite challenges in the investment segment, industrial demand remains a solid driver for silver prices. Silver industrial fabrication is projected to reach an all-time high in 2025, primarily driven by growth in renewable energy sectors, especially photovoltaics, and automotive electrification. The demand from consumer electronics and other industrial applications, including ethylene oxide production, will also contribute positively to the overall demand for silver.
On the supply side, global silver production is expected to increase by 3%, reaching 1.05 billion ounces. Growth will be driven by higher mine output from key countries such as China, Canada, Chile, and Morocco, along with a 5% rise in silver recycling. However, even with an increase in supply, the silver market will still remain in a deficit of approximately 149 million ounces, a 19% reduction from the previous year's deficit.
While the US dollar and rising Treasury yields present headwinds for silver investment, the broader macroeconomic and geopolitical risks continue to support silver’s role as a safe-haven asset. Investors are likely to maintain interest in silver and other precious metals as part of a portfolio diversification strategy.
Finally
Silver’s market remains in deficit due to strong industrial demand, despite challenges in investment, especially from the Chinese economy. Silver prices are supported by geopolitical risks and market uncertainty.
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