Silver is one of a kind, capturing market attention as both a precious metal and a critical raw material. Despite being a reliable safe haven, industrial demand is expected to be its dominant driver this year.
In solar panels, silver paste is used to form electrical contacts that transfer generated energy. New technologies like TOPCon and HJT keep gaining popularity, boosting consumption. These models are far more efficient but require 30%–80% more metal than older ones.
The solar sector alone accounts for nearly 20% of global silver demand. Given the world's dedicated efforts to move towards greener energy by 2030, this figure is only set to rise. There are even more reasons for this asset to outshine gold, primarily due to a structural deficit. The key safe haven is primarily stored in bullion and jewelry, meaning it can be melted and returned to the market. Silver, on the other hand, is actively consumed in industry, with little potential for recycling it from products like old phones or solar panels, as it is often economically unviable. Basically, this metal is a non-renewable resource.
The shortage issue is also intensified by the following factors:
1. Depleted reserves. The Commodity Exchange Inc. and the London Bullion Market Association are currently struggling to maintain adequate stockpiles.
The LBMA (London) is a key physical silver hub. Its inventories have recently fallen to multi-year lows. The remainder is now in ETFs like the iShares Silver Trust—unavailable for industrial needs.
The COMEX (New York) is even in a tougher spot. Registered stocks—metal that is ready for immediate shipment under contracts—have plummeted several times compared to pre-pandemic levels.
2. Indian and Chinese frenzy. These nations act as the market’s so-called “vacuum cleaners.” From 2024 to 2025, India’s import levels hit record after record, as the country purchased it for investments and the jewelry segment. Meanwhile, China aggressively accumulated silver for its solar panel production.
The current correction in prices was driven by technical overbought conditions and the unwinding of excessive speculative margin positions. Following this purge, the market may breathe out and continue its upward movement backed by strong fundamental factors.
The overall recommendation is to buy silver during the current correction for the medium term. Lock in profits at $105.00. Place Stop Loss at $45.00.
Always size the position so that your potential loss (protected by a Stop Loss) is no more than 1% of your account balance. If you can't open a position that meets such a risk criterion, it's safer to skip this trade and wait for a better, lower-risk opportunity.
This content is for informational purposes only and is not intended to be investing advice.
