Selling silver amid declining production in US and Europe

Silver appears more volatile than gold, being caught between geopolitical tensions and production-related risks. Its counterpart—the key safe haven—tends to follow market fears. The white metal, in turn, possesses unique characteristics that create a conflict of interest. Let’s break down the situation.

1. Green energy and photovoltaics

Demand from solar panel manufacturers has already hit record levels this year, driven by the global energy transition that requires significant amounts of silver. This dynamic places a solid floor under the price.

Another factor supporting the precious metal is the expanding infrastructure for neural networks, which heavily relies on vast quantities of high-conductivity components—making silver nearly irreplaceable.

On the downside, industrial demand could slump if soaring oil quotes and elevated interest rates stifle global production. Silver is more sensitive to such economic headwinds than gold.

2. Physical metal deficit

The silver market has grappled with the shortage issue for five consecutive years. Major mines in Mexico and Peru continue to experience operational disruptions and labor strikes. Meanwhile, warehouse inventories at the LBMA and COMEX exchanges sit at multi-year lows, leaving prices highly susceptible to large-scale purchases.

3. Gold/silver ratio

The gold-to-silver ratio is currently around 80–82. Historically, when the primary safe haven surges to new highs—as gold has recently, climbing above $5,300—silver tends to follow, albeit with a slight lag. However, once it catches up, its ascent is often steeper due to a “spring” effect.

The near-term outlook for the white metal will be shaped by the upcoming industrial reports from the United States and the European Union. If these data do not meet market expectations, the asset could pull back to the $70.0 support.

The overall recommendation is to sell silver if production levels in Europe and America go down. Profits should be taken at the level of $70.0. Stop Loss could be set at $98.0.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.