Silver's Steady Climb: What's Driving the Momentum?

Silver Prices Show Resilience

As of mid-May 2025, silver prices have demonstrated stability, with recent trading sessions showing a bounce back to defend the crucial $32 per ounce level. This resilience is noteworthy, especially considering the broader market volatility and economic uncertainties.

Industrial Demand Supports Prices

Silver's extensive industrial applications continue to underpin its fundamental demand outlook. The metal plays a crucial role in various high-tech and green energy applications due to its exceptional electrical conductivity, thermal properties, and reflectivity. The renewable energy sector represents a particularly significant source of silver demand. Photovoltaic solar panels use substantial amounts of silver in their production, with each panel containing approximately 20 grams of the metal. As global solar installation continues to accelerate, this represents a structural growth driver for silver demand.Electronics manufacturing also remains a key consumer of silver, with applications ranging from smartphones and tablets to automotive electronic systems. The ongoing electrification of transportation and expansion of 5G networks has further increased silver usage in these sectors during 2025. The medical industry provides another source of growing demand, as silver's antimicrobial properties make it valuable in various healthcare applications. From wound dressings to medical device coatings, silver's unique characteristics have supported consistent demand from this sector, contributing to the metal's overall price strength.

Supply Constraints and Market Deficit

The silver market is forecast to record another significant deficit for the fifth consecutive year in 2025. Silver industrial demand will remain the key driver of this favorable supply/demand backdrop, with volumes projected to hit a new record high this year. Concerns about President Donald Trump’s anticipated tariff policies have fueled short covering and deliveries of silver into CME warehouses since late 2024. This, coupled with rising economic and geopolitical uncertainties, has underpinned a healthy recovery in silver prices since the start of 2025.

Technical Outlook and Price Projections

From a technical perspective, silver is approaching significant resistance levels between $34.87 and $35.40 per ounce.These price points have historical significance and may present challenges to immediate further upside, potentially triggering profit-taking among short-term traders. The relative strength index (RSI) for silver has moved into moderately overbought territory on daily charts, suggesting the possibility of a short-term consolidation or pullback. However, the weekly RSI remains in neutral territory, indicating that the broader uptrend remains intact despite potential near-term volatility. Support levels have been established around $32.50 and $31.20, which correspond to previous resistance zones that have now become support following the recent breakout. These levels may provide buying opportunities on pullbacks for traders looking to establish or add to long positions. Several technical analysts have projected that if silver successfully breaks through the $35.40 resistance level on sustained volume, the next target could be the $38-40 range by mid-2025.

Note: All prices mentioned are in U.S. dollars (USD).

Note: This content is for informational purposes only and does not constitute financial advice. Always perform your own due diligence or consult a qualified advisor before making investment decisions.