Only level of 33.5 prevents silver from reaching highs in 2025

After a slight pullback on Thursday, silver is recovering the losses of early April. Its price easily overcame the level of 32.15 and consolidated above it, confirming the persistent buying activity. Now, the metal is facing the level of 33.5. Breaking it from below upwards will open the path to March’s highs. Given the current fundamental background and technical data, the level of 33.5 may be tested in the coming days. 

At the end of last week, the Silver Institute released its 2025 market forecast. This year is expected to mark the fifth consecutive year of silver deficit. Although the metal shortage will ease slightly due to the slowdown in the solar sector, the ratio of supply and demand is still very far from equilibrium. Miners will not be able to fulfill the demand for 117 million ounces of silver, so it will have to be met through recycling.

Philip Newman, Managing Director at Metal Focus, has an optimistic outlook for the global silver market. He estimates that even if industry does not increase silver demand in 2025, it will be fully offset by investors. Newman expects the consumption by financial market participants to surge by 14% to 70 tons. The trend will be supported by the stabilization of the gold-silver ratio.

At the moment, the ratio is close to its five-year high and is above the significant level of 100. In 2020, less than 2 months passed before it returned to the initial positions. Metals Focus estimates that the ratio is set to roll back to 60. However, even a drop to the range between 75 and 80 will be enough to bring silver closer to $40 per ounce.

The RSI is still far from the overbought zone on the daily chart. There are no technical signals limiting the price growth yet.

Consider the following trading strategy:

Buy silver at the current price. Take profit – 33.5. Stop loss – 32.15.