The silver price reached highs not seen since 2012 this past year, supported by an ongoing deficit and increasing interest from investors as geopolitical concerns prompted safe-haven buying.
The white metal reached its highest point for the year in October, breaking through US$34 per ounce on the back of a shifting post-pandemic landscape and geopolitical tensions. However, Donald Trumps victory in the US presidential election just a few weeks later buoyed bond yields and the US dollar while weighing on silver and its sister metal gold.
What will 2025 hold for silver? As the new year approaches, investors are closely watching how Trump’s policies and actions could impact the precious metal, along with supply and demand trends in the space.
Here’s what experts see coming for silver in 2025.
As Trump’s inauguration approaches, speculation is rife about how he could affect the resource industry.
The president-elect ran on a policy of “drill, baby, drill,” and while his focus was largely on oil and gas companies, mining sector participants have taken it as a positive sign for exploration and development.
However, part of the help Trump has promised to mining companies comes from reneging on environmental commitments, including the Paris Agreement. This could end up weighing on silver.
Current President Joe Biden’s Inflation Reduction Act includes tax credits and deductions for solar projects, and some experts are concerned that the incoming administration and the new Elon Musk-led Department of Government Efficiency (DOGE) could impose reversals or have the entire act gutted.
“Tesla bought SolarCity, which became Tesla Energy. They are an important provider of solar panels. Again, Musk’s new role heading DOGE and obvious close connection to Trump just might help mitigate risks to Tesla and its solar panel/power storage business. If that happens, and whatever form it may take, it could shelter solar panel production and sales in the US to a considerable degree,” Krauth explained via email.
He also noted that Trump’s presidency isn’t without risks and that much uncertainty still remains.
Mind Money CEO Julia Khandoshko also isn’t worried about solar demand in the US.
“Rolling back ESG policies and returning to carbon-based technologies could slow the green energy transition in the US. However, Europe and China, the main drivers of the green transition, remain committed to clean energy, which increases silver demand. Thus, global trends will continue to support silver use in renewable energy technologies,” she told INN.
Industrial segments have been critical for silver demand in recent years.
The institute attributes much of this increase to energy transition sectors, highlighting photovoltaics in particular.
However, these gains are coming alongside flat mine production, which is expected to grow only 1 percent to 837 million ounces during 2024. Once factored in, secondary supply from recycling pushes the total supply of silver to 1.03 billion ounces, a considerable gap from the 1.21 billion ounces of total demand.
Both Krauth and Khandoshko think the gap between silver supply and demand will continue.
Krauth suggested that companies have been dipping into aboveground inventories to narrow the gap, which has helped to keep the price of silver from exploding over the past year. “That supply is quickly drying up, so I expect to see renewed upward price pressure since silver miners are unable to grow output,” he told INN.
Khandoshko expressed a similar sentiment, saying demand is likely to keep outpacing supply.
However, she also sees geopolitics and a global macroeconomic situation that could constrain both demand and supply growth in 2025. For example economic difficulties in Europe and China could slow energy transition demand.
When it comes to supply, Khandoshko told INN that she sees a different scenario.
“The problem is that silver production is mainly concentrated in geopolitically challenging areas, such as Russia and Kazakhstan, where securing funding for supply expansion is quite difficult,” she explained.
“These factors limit silver’s growth potential compared to gold, which in turn benefits from its role as a safe-haven asset during times of economic uncertainty.”
As silver supply becomes increasingly stressed, experts are eyeing projects that are ramping up.
Krauth said a rising silver price is likely good news for mergers and acquisitions in 2025.
“Higher prices, since they translate into higher share prices, meaning acquirers can use their more valuable shares as a currency to acquire others … I think 2024 will bring deals between mid-tiers and between juniors,” he said.
Krauth added, “The truth is that many mid-tier producers have not been spending on exploration. Something has to give, so I think we’ll see this space heat up.”
Khandoshko and Krauth have similar silver outlooks for 2025, suggesting a possible pullback.
“Due to supply shortages and increasing demand in the coming months, silver is expected to reach US$35. After this, a slight pullback to US$30 would be possible,” Khandoshko said.
However, after that happens she projects another rise, with silver potentially passing US$50.
Krauth was looking for silver to reach US$35 in 2024, which happened in Q4. Looking forward to 2025, he thinks the white metal will revisit that level in the first quarter, with US$40 or more possible later in the year.
However, he suggested that investors should be cautious of wider economic trends affecting silver.
“There is a serious risk of significant correction in the broader markets and of a recession. A broad market selloff could bleed into silver stocks, even if only temporarily,” Krauth said.
In the case of a recession, a lack of industrial demand could create headwinds for silver. Still, Krauth thinks that could be tempered by government stimulus efforts for green energy and infrastructure.
Overall, 2025 could be a significant year for silver investors. However, geopolitical and economic instability may provide headwinds across the resource sector and could stymie silver’s upward momentum.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Prismo Metals is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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