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SILVER INSTITUTE REPORT Global silver market forecast to remain in a sizeable deficit in 2025
1. Market Deficit Dynamics
- Fifth Consecutive Deficit: The silver market is projected to remain in a deficit of 149 million ounces (Moz) in 2025, marking the fifth straight year of supply shortfalls. Though the deficit shrinks by 19% year-on-year, it remains historically significant, signaling persistent structural imbalances.
- Demand Stability: Global demand holds steady at 1.2 billion ounces, with industrial applications (notably green tech and electronics) offsetting declines in jewelry and silverware.
2. Industrial Demand Drivers
- Record Industrial Use: Industrial fabrication grows 3% to over 700 Moz, driven by:
- Green Economy: Photovoltaics (PV) installations hit new highs globally, despite potential U.S. renewable energy slowdowns under Trump.
- Automotive Sector: Vehicle electrification and infrastructure expansion boost silver use, even with slower EV growth.
- AI and Electronics: Artificial intelligence drives demand for consumer electronics.
3. Jewelry and Silverware Weakness
- Price Sensitivity: High silver prices lead to a 6% drop in jewelry demand (notably -10%+ in India) and a 16% decline in silverware fabrication.
- Western Resilience: Shift from gold to silver jewelry in Western markets supports demand, particularly for branded products.
4. Supply-Side Growth
- Mine Production Rises 2%: Output reaches 844 Moz (7-year high), aided by expansions in Canada (Keno Hill), Chile (Salares Norte), Morocco (Zgounder), and China.
- Recycling Surge: Recycling grows 5% to over 200 Moz (first since 2012), led by industrial scrap (e.g., ethylene oxide catalysts) and Indian price-driven liquidations.
- Base Metal Risks: Flat by-product output from lead-zinc mines due to suppressed base metal prices poses supply risks.
5. Investment Trends
- Recovery in Physical Investment: Up 3% in Europe/North America as investors adjust to higher prices, though India sees profit-taking.
- Macro Drivers: Geopolitical uncertainty, U.S. debt concerns, and potential Fed rate cuts underpin safe-haven demand. Short covering in futures markets (linked to Trump tariff fears) boosts prices.
- Gold-Silver Ratio: Elevated ratio suggests silver may be undervalued relative to gold, offering potential upside if sentiment shifts.
6. Risks and Challenges
- Trade Policy Impact: Trump’s tariffs could dampen global growth and industrial metals demand, though silver’s dual role (industrial/investment) may buffer it.
- Real Rates and Inflation: Sticky inflation and anticipated rate cuts could lower real rates, benefiting precious metals.
7. Forward Outlook
- Price Support: Deficit persistence, industrial demand resilience, and safe-haven inflows suggest a bullish floor for prices.
- Watchpoints: Tariff impacts, base metal production trends, and Fed policy shifts will be critical in 2025.
The 2025 silver market reflects a delicate balance: robust industrial demand and investment recovery counterbalance supply growth and jewelry weakness. While risks from trade policies and base metals linger, silver’s structural role in the green transition and as a monetary asset positions it for sustained relevance. Investors should monitor the April 2025 World Silver Survey for deeper insights into evolving dynamics
Gold prices in India saw a modest rise on Wednesday today Oct 15, mirroring an uptick in international markets as renewed US-China trade tensions and expectations of further US interest rate cuts bolstered demand for safe-haven assets.24k gold traded at Rs.1,28,360/10gm after gaining ₹10 in early trade, while silver prices increased by Rs.100 to Rs.1,89,100 per kilogram.
Gold prices surged to a record high of $4,179.48 per ounce on October 14, 2025. Investors flocked to safe-haven metals amid trade tensions and Fed rate-cut expectations. U.S. December gold futures jumped 57% year-to-date. Bank of America raised its 2026 gold forecast to $5,000 per ounce, warning of possible near-term corrections.
Gold prices soared to an unprecedented $4,179.48 per ounce on October 14, 2025, marking a historic milestone for the yellow metal. The rally comes as investors worldwide seek safety in hard assets amid a turbulent global economic backdrop marked by escalating trade tensions, slowing growth, and expectations of further interest rate cuts by the U.S. Federal Reserve.
The sharp surge in bullion prices has been driven by a combination of macroeconomic uncertainty and aggressive monetary easing. As inflation pressures remain sticky and central banks pivot toward dovish policies, gold has reasserted its role as a hedge against both currency debasement and market volatility.
In futures trading, U.S. December gold contracts have skyrocketed nearly 57% so far this year, underscoring the strength of investor demand across both institutional and retail segments. Analysts note that central bank buying—particularly from emerging markets—has added further momentum to the rally, with several countries diversifying reserves away from the U.S. dollar.
Reflecting this bullish sentiment, Bank of America has raised its 2026 gold price forecast to $5,000 per ounce, citing continued monetary easing, geopolitical instability, and robust central bank accumulation. However, the bank also cautioned that short-term corrections are likely, given the rapid pace of the recent run-up and potential bouts of profit-taking.
Overall, gold’s meteoric rise underscores a broader shift toward safe-haven assets, as investors navigate a world increasingly defined by economic fragmentation, shifting interest rate cycles, and persistent geopolitical risks.
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