Structural deficits in Silver Futures meets Industrial Demand
From the Trading Desk at Stipelis
The Strategy Session
8-20-2025
Silver futures are trading at $37.875/oz (September contract), marking a near 27% year-to-date gain and sustaining levels not seen in over a decade.
This move is underpinned by a structural deficit, now extending into a fifth consecutive year, with industrial demand projected to hit record highs.
Approximately 55% of silver consumption comes from industry, led by electronics, solar panels, and electric vehicles.
Solar demand alone is expected to exceed 200 million ounces annually, while broader electrification and IoT expansion reinforce silver’s irreplaceable role in modern technology.
On the supply side, Mexico, China, and Peru remain the top producers, but mining growth has failed to keep pace with demand.
Recycling adds volume, yet the gap persists, sustaining the bullish narrative.
Globally, the silver market is valued at $21.91 billion in 2025, with growth projected to $28.43 billion by 2033, at a steady CAGR of 3.31%.
Technically, silver is consolidating just under its 52-week high of $39.91, with a daily pivot at $37.59 and key support near $36.98–36.63.
Resistance zones cluster at $37.94, $38.55, and $38.90.
Momentum indicators suggest neutrality: RSI at 50.37 and Stochastics near mid-range (56.17%K, 54.64%D).
The ADX at 16 reflects a market lacking strong trend conviction, though the longer-term uptrend remains intact above the 50-day moving average ($37.48) and well above the 200-day average ($33.52).
Volume dynamics show slight cooling, with daily volume at 66,192, about 8% below the 20-day average, suggesting traders are awaiting clearer directional signals.
Open interest remains robust at 158,722 contracts, keeping liquidity intact.
Strategically, silver offers a compelling blend of industrial utility and monetary hedge appeal.
With the gold/silver ratio at ~90, silver looks undervalued relative to gold, reinforcing its attractiveness as a diversification tool.
Short-term traders should monitor the $38.55–38.90 resistance band: a breakout could retest the $39.91 highs, while failure could pull prices back toward $36.80–36.20 support.
In summary, the silver market is structurally tight, supported by transformative demand from renewable energy and electrification.
While near-term price action shows consolidation, the broader outlook favors continued strength, especially if industrial growth sustains and macro volatility keeps investor demand elevated.
The opinions expressed are those of Stipelis Global Trading LLC and are considered market commentary. They are not intended to act as investment recommendations. Individuals should make investment decisions based on their own analysis and with direct consultation with a financial advisor.
Stipelis Global Trading LLC is registered with the Commodity Futures Trading Commission and is a member of the National Futures Association. Member ID 0474441
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