How could a deficit of silver supply affect the price of the precious metal?

The precious metals market is going to record a silver shortage, suggesting a positive boost to the metal's prices. However, it is necessary to consider a range of other factors determining the cost of silver in the medium term. So, there have already been annual supply deficits of the metal that didn’t cause fluctuations in its value. 

The Silver Institute anticipated that global demand for the precious metal is expected to rise in 2022. In this regard, the growth is set to be 16%. Therefore, the demand for silver will stand at 1.21 billion ounces. On the other hand, a precious metal’s output is going to increase from 998 million ounces to 1.017 billion ounces, putting the market at a deficit of 193 million ounces. 

Investors suggest the demand for silver to rise this year, hitting various sectors. However, its shortage isn’t a sign of higher prices for the metal. 

As reported by gold.ru, there have been five periods between 2011 and 2022 when the market recorded a silver supply deficit. These include: 2012 (-24.4 million ounces), 2013 (-36.2 million ounces), and 2019 (-63.4 million ounces), with the precious metal's value falling by a third in 2013.