1. Industrial Demand: The Cornerstone of Silver’s Rise
Silver’s unique properties—high conductivity, corrosion resistance, and versatility—make it indispensable in cutting-edge industries:
Construction Boom:
• Residential construction is expected to grow by 10% into 2025, while the Asia-Pacific region’s construction activity will reach $9.5 trillion by the same year. India’s government policies are projected to support 7% construction growth. Silver’s applications in heating systems, electrical wiring, roofing materials, and insulation underline its importance in modern infrastructure.
• Industrial demand is set to reach a record high of over 700 million ounces in 2025, marking a 7% annual growth. This surge is driven by the renewable energy transition, where silver plays a pivotal role in photovoltaics.
Expanding Data Centres:
• The surge in AI and cloud computing is driving data centre expansion, with capacity projected to rise by 33% annually through 2030. Silver’s use in electronics ensures it remains at the heart of this growth.
Green Energy Giants:
• The Mohammed bin Rashid Al Maktoum Solar Park in Dubai aims to produce 5,000 MW by 2030, reducing 6.5 million tons of carbon emissions annually. Projects like this highlight Silver’s critical role in solar panel technology.
• NEOM Green Hydrogen Project in Saudi Arabia, the largest green hydrogen facility globally, will utilize 319 metric tons of silver for its solar panels alone. Once operational in 2026, it will produce 600 tonnes of clean hydrogen daily, showcasing silver’s integral role in renewable energy.
2. Supply Constraints: A Looming Deficit
While demand surges past 1.21 billion ounces in 2024, global silver production struggles to keep pace, creating a supply deficit of 182 million ounces. Limited exploration for new reserves adds to the imbalance, tightening the market further.
3. Safe Haven Amid Economic Shifts
Silver’s dual role as an industrial and precious metal makes it a preferred hedge in uncertain times:
• Geopolitical and Economic Policies: Tariffs and inflationary pressures from major economies, like those under Trump-style policies, could push silver prices higher as a hedge against inflation.
• Global Inflation Trends: With inflation concerns mounting, silver’s historic performance as a store of value gains relevance.
4. Market Correction Potential:
Reports of market manipulation through paper contracts have historically suppressed silver prices. However, growing regulatory scrutiny and rising physical demand could lead to price corrections, revealing the metal’s true value.
ETMarkets.comAs shown in the chart above, since the peak of 2011, gold has delivered an impressive return of 46%. In contrast, silver is currently trading 30% below its peak from the same period.
ETMarkets.comSilver has strong international support between $28.00 and $30.00 per ounce. It is expected to target $36.00 per ounce, with a second target of $44.00 per ounce.
Domestically, Rs 88,500 to Rs 90,000 per kg will act as robust support, with potential moves to Rs 1,10,000 and Rs 1,25,000 per kg.
A Gleaming Opportunity for 2025
With record industrial demand, a persistent supply deficit, and growing recognition of its strategic value, silver is set to shine in 2025. For investors, this could be the ideal time to catch the wave before prices reflect the full potential of this versatile metal.
Will silver claim its rightful place as a market leader? Only time will tell, but the signs are unmistakable: 2025 could be the year silver sparkles brighter than ever.
(The author is MD, CR Forex Advisors)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)