Silver prices are rebounding strongly after April’s sell-off. The metal is up 20% for the year, continuing to build momentum from greater industrial demand. That isn’t likely to wane anytime soon.
While silver can operate as a precious metal, it’s importance as an industrial metal is giving it a strong growth component. Its usage in electrical technology like solar panels makes it crucial in the future as greater reliance on electricity becomes apparent. Additionally, with the proliferation of disruptive technologies like AI, this will require data centers that consume copious amounts of electricity. In turn, this is fueling silver demand, which is likely to remain elevated, according to The Silver Institute.
The economic environment is also giving silver a boost. While the Fed continues to mull interest rates, the expectation of cuts can add to silver’s bullish case. Adding to the perfect economic landscape for bullish silver prices is high demand met by low supply. As mentioned by FX Empire, silver is entering its fifth year of a structural supply deficit.
“Although the shortfall is expected to narrow by 21% this year, limited new production—since most silver is a by-product of mining other metals—means tight supply conditions are likely to persist,” FX Empire mentioned.
Silver Shining Brighter Than Gold?
In 2024 and halfway through 2025, rising gold prices have been the headlining story for commodities. But is the precious metal losing its luster? In addition to the aforementioned fundamental factors, technical indicators are also working in silver’s favor. Some market experts see gold entering overbought territory, thus creating an opportunity for silver prices to catch up.
“I think that we could see silver starting to catch up in the second half on that ratio aspect, with potentially an additional upside in gold,” said Peter Krauth, author of The Great Silver Bull and publisher of SilverStockInvestor.
“I don’t think it’s going to be capped at $3,300 or $3,400 for the rest of the year. But let’s say the average is something like $3,500 or a little bit higher in the second half. I think we can see the ratio come down… conservatively, you’re probably looking at maybe 75 to one, somewhere around there,” he added.
More Tangible Investment Experience Available
With fundamental and technical indicators working in silver’s favor, consider exposure to the metal via the Sprott Physical Silver Trust (PSLV ). The fund invests in unencumbered and fully allocated London good delivery silver bars. Additionally, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions) if they want a more tangible investment experience.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
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