SOURCE
The silver market has faced a persistent structural deficit for over four years, with annual demand consistently outstripping supply. This imbalance has eaten into dwindling above-ground stockpiles, raising serious concerns about the sustainability of current reserves. With Donald Trump now sworn in as the 47th President of the United States and his focus on revitalising American industries, the pressure on silver demand, and prices, looks set to intensify.
Silver demand is largely driven by its industrial uses, including renewable energy technologies like solar panels, advanced electronics, and medical devices. In 2024, despite efforts to stabilise production, global silver output remained insufficient to meet demand. Production stood at just 822 million ounces, marking only a marginal improvement over 2023 but still failing to close the gap, according to the SILVERINSTITUTE.ORG. Primary silver mining and secondary production, where silver is extracted as a by-product of mining other metals, remain constrained.
SOURCE
Trump’s “Make America Great Again” agenda could exacerbate this situation. His pro-industrial policies, including plans to expand domestic manufacturing and infrastructure, are likely to drive greater demand for industrial silver. This is particularly relevant for sectors such as solar energy, electronics, and medical applications, where silver is an essential component. With supply unable to scale up, the structural deficit will likely worsen, further depleting stockpiles and pushing prices higher.
The Silver Institute has repeatedly highlighted this prolonged mismatch as a "structural deficit" caused by underlying shifts in industrial demand. Recycling efforts and mining production have struggled to bridge the gap, leaving investors to speculate on how much longer stockpiles can meet demand.
For investors, this environment presents an opportunity. Silver’s dual role as both an industrial metal and a store of value positions it uniquely in the precious metals market. As the deficit deepens and prices react, silver could offer attractive returns for those looking to hedge against economic uncertainty or inflation.
With Trump’s policies poised to amplify industrial demand, the silver market remains one to watch. Whether this deficit triggers a long-term bull market or leads to unprecedented supply challenges, it’s clear that silver will remain a focal point in the precious metals sector. For those considering their next move, monitoring these trends will be key to staying ahead in an increasingly dynamic market.
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