SI & MF: Silver shortage will continue in 2025

This year will be the fifth consecutive year of scarcity for the global silver market. But the difference between supply and demand will be the lowest in 4 years — 117.6 million ounces against 148.9 million ounces by the end of 2024, experts at The Silver Institute & Metals Focus say.

At the same time, if we do not take into account the dynamics of exchange—traded funds, we can see a shortage of silver for the seventh consecutive year, but in terms of volume it will still be 11% lower than last year - 187.6 million ounces.

The factors that supported the prices of precious metals during 2024 have persisted this year. Moreover, they are reinforced by the uncertainty surrounding US trade and foreign policy with the arrival of a new administration in the person of Donald Trump. As a result, silver had a strong start, starting 2025 at just under $29/oz, its price rising to over $34 by mid-March.

"Having been left behind during the late 2024 rally, we expected silver to catch up with gold sooner or later. These expectations have not yet been fulfilled. In the near future, we believe that conditions for silver will remain positive," the experts noted.

Uncertainty remains regarding US trade and tariff policy. Concerns about the prospects for the US dollar are also being reinforced by the Fed's rate cuts, the new US administration's desire to reduce the country's trade deficit and stimulate the manufacturing sector, as well as inflating government debt. All this should further enhance the attractiveness of precious metals.

In addition, geopolitical tensions remain on the agenda, which will bolster interest in safe haven assets in the near future.

"Finally, the continued growth of gold purchases by central banks will also have a positive impact on silver prices. Considering all the factors, the metal has a good growth potential," the report says.