Analysts tip silver to outperform gold as supply deficit persists

Commodity analysts are suggesting that industrial demand, led by the solar sector, will drive silver prices as high as US$35 in 2025 and US$38 in 2026.

Although it has constantly struggled to emerge from gold’s shadow, numerous analysts believe growing industrial demand and dwindling supply should help silver begin to shine in its own right.

Earlier this week, independent economic insights firm Capital Economics even tipped silver to outperform gold over the coming years.

Substantial silver deficit

The Washington-headquartered Silver Institute reported overnight that it expected the global silver market to remain in a sizeable deficit in 2025 for a fifth consecutive year.

It also forecast that industrial demand would remain the key driver of the favourable silver supply/demand backdrop, with volumes projected to hit a new record high.

According to the institute’s latest report, concerns about President Trump’s anticipated tariff policies have fuelled short covering and deliveries of silver (and other precious metals) into Chicago Mercantile Exchange warehouses since late 2024.

Coupled with rising economic and geopolitical uncertainties, this has underpinned a healthy recovery in silver prices since the start of 2025.

China weighs on sentiment

“Over the same time, silver investment has faced several challenges [such as] ongoing concerns about the prospects for the Chinese economy,” the institute reported.

“[This] helps explain the elevated gold:silver ratio that has persisted.”

The new study forecast that global silver demand is likely to remain broadly stable at 1.2 billion ounces in 2025, with gains in industrial applications and retail investment offset by weaker jewellery and silverware demand.

Silver industrial fabrication is tipped to grow by 3% this year, with volumes on track to surpass 700 million ounces for the first time.

While growth in the automotive industry is anticipated to slow, the institute believes that greater vehicle sophistication, the electrification of trains (albeit at a reduced pace) and ongoing investment will boost silver demand.

Consumer electronics boost

Gains are also expected in the consumer electronics market, as the development of artificial intelligence systems continues to boost product offerings.

Demand for silver in the “other” industrial category should edge higher, mainly due to some upside in the ethylene oxide sector.

While physical investment in silver is also tipped to increase by 3% due to improving demand in Europe and North America, weakness in India is anticipated to cause silver jewellery demand to fall by 6%.

At the same time, global silver supply is forecast to grow by 3% in 2025 to an 11-year high of 1.05Boz, with silver mine production also expected to rise 2% to a seven-year high of 844 Moz.