The silver market is expected to face a significant supply shortfall in 2025 for the fifth consecutive year, with global demand once again outpacing available supply by an estimated 149 million ounces, according to analyses from the Silver Institute. Although this deficit is 19% lower than in 2024, it still represents a “historically large” gap and is likely to influence global prices in the coming months.
While global silver production is projected to rise by 2% to reach a seven-year high of 844 million ounces, supply will still fall short of the anticipated 1.20 billion ounces in demand for the year. This growing demand is being driven by multiple factors, most notably the steady expansion of industrial sectors and rising investment interest. At the same time, demand in jewelry and silverware is showing a notable decline.
One of the key drivers of demand in 2025 is the industrial sector, which is expected to grow an additional 3%, fueled by the increasing use of silver in solar panels, electronic circuits, and high-conductivity components. Despite U.S. policy pressure on green energy initiatives, estimates suggest global solar installations will hit another record high this year.
Artificial Intelligence (AI) is also amplifying silver demand, as the metal is essential in high-speed processors, connectors, and heat dissipation systems used in massive data centers. This trend is set to continue as global digital infrastructure rapidly expands.
On the investment front, silver demand is expected to grow by 3%, driven by rising retail buying in the West, as individuals increasingly turn to precious metals as a hedge against economic volatility. With U.S. stock markets reaching record highs and concerns mounting over the country’s public debt, investors are reconsidering diversification strategies, boosting interest in silver and gold.
Analysts warn that any sudden financial crisis or persistently high inflation could trigger a surge in silver investment demand. The U.S. Federal Reserve finds itself caught in a policy dilemma: it needs to maintain high interest rates to combat inflation, yet the debt-heavy economy struggles under such conditions. This raises the possibility of stagflation—a scenario combining slow economic growth with rising prices which could further fuel demand for silver as a safe haven.
