Tariff uncertainty and rising U.S. deficits continue to support metal demand.
Despite softer demand, silver shortages persist, keeping upward pressure on prices.
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prices have been moving sideways since mid-April, showing no strong trend. For the past two weeks, technical signs have suggested that a rise might be coming—and now, at the start of a new month, that breakout seems to be happening.
One reason is increased market uncertainty caused by President Donald Trump’s unpredictable statements on tariffs, which are pushing investors toward metals like silver. Another factor is the US government’s fiscal policy. As the deficit increases and interest payments go up, silver demand could also rise.
Will Silver Demand Fall This Year?
Since 2021, the silver market has consistently seen demand outpace supply, which has driven prices up by more than 50%. Forecasts remain positive for buyers, though the gap between supply and demand is expected to narrow in 2025. The Silver Institute estimates this year’s silver shortage at around 117–118 million ounces, lower than the 148.9 million ounce shortfall in 2024, and the smallest since 2021. Between 2021 and 2024, the total supply shortfall added up to 678 million ounces.
This improvement is mostly due to a slight drop in demand, from 1.2 billion to 1.15 billion ounces, thanks to steadier industrial usage. At the same time, producers have responded to higher prices by increasing silver output by about 1.5% year-on-year, helping ease the imbalance.
Tariff tensions also influence silver prices. If trade conflicts worsen, global GDP growth could slow, reducing demand even further. Additionally, if the US sticks with its “drill baby drill” energy strategy, it could put pressure on renewable energy sectors that use silver.
Despite these factors, silver shortages are still expected in the short and medium term. This ongoing imbalance supports the view that prices may push toward new long-term highs.
Will Silver Buyers Push Through Key Highs?
A breakout to the upside signals the start of a bullish trend. A breakout above $35 would mark the start of a bullish trend targeting new long-term highs.
Right now, demand is slowing down slightly, but the broader demand outlook remains unchanged. Buyers appear to be defending the key support zone where the upward trend line meets the $34 per ounce level.
In the short term, silver is trading within a range of $34.20 to $35 per ounce. A breakout above or below this zone will likely determine the next clear move in price.
Given the current short-term technical setup and macroeconomic backdrop, an upward breakout appears more likely. This would extend the demand momentum that began on Monday.
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