I’ve been recommending people buy silver and silver mining stocks for about a year now. Today, it broke out of a bullish flag pennant. And hit a 14-year high.
The price of silver looks like it is will go much higher. Here are five reasons why.
Reasons Silver Prices May Rise:
- Persistent Supply Deficit: The global silver market is expected to face a significant deficit for the fifth consecutive year in 2025, projected at 149 million ounces. This is driven by demand outpacing supply, with industrial demand hitting record highs while mine production struggles to keep up. For example, 2023 saw a deficit of 184.3 million ounces, and 2024 is estimated to be 182 million ounces, which will tighten available supply and support higher prices.
- Rising Industrial Demand: Silver’s role in industrial applications, particularly in green technologies, is a major driver. The photovoltaic (solar) sector, the automotive industry (including electric vehicles), and consumer electronics are boosting demand. Samsung has a new electric vehicle battery that will have a range of 600 miles and can recharge in 9 minutes. This solid-state battery will be mass-produced by Lexus in 2027, and it will consume 32.2 ounces of silver per unit, potentially requiring 466.7 million ounces annually, which could account for 58% of global silver production (800 million ounces).
- Falling U.S. Dollar: Silver prices often have an inverse relationship with the U.S. dollar. A weaker dollar, potentially driven by anticipated Federal Reserve rate cuts in 2025 or inflationary pressures from policies like tariffs, makes silver more attractive as a hedge against currency devaluation. A declining dollar supports precious metal prices, with silver benefiting alongside gold.
- Geopolitical and Economic Uncertainty: Ongoing geopolitical risks (e.g., Middle East tensions, U.S. tariff policies) and macroeconomic uncertainties (e.g., inflation concerns) drive safe-haven demand for silver.
- Limited Supply Growth: Global silver supply is constrained, with total supply projected at 1.05 billion ounces in 2025, despite a 3% increase. Mine production is only expected to reach 844 million ounces, and while recycling is up, it’s insufficient to close the deficit. Declining ore grades and limited new mine discoveries further restrict supply, supporting price increases.
I like silver so much that I did a video about it. Check out this week's edition of Outsider Club Chart Wars. Brit and I go head to head with two charts. Click the link and find out what Brit is buying, and my favorite way to own silver, including the ticker.
All the best,
Christian DeHaemer
