Silver Maintains Steady Trading at $32.97 as Market Digests Fifth Year of Supply Deficit

The Silver Institute’s latest market analysis reveals silver trading at $32.97 per ounce on May 6, 2025, positioning the metal within a persistent five-year supply deficit pattern.

Silver prices experienced a slight decline from yesterday in both Western and Eastern markets. Indian silver rates settled at ₹96.90 per gram in major cities, reflecting a marginal ₹0.10 dip from the previous session.

Market analysts highlight the narrowing but significant deficit of 117.6 million ounces for 2025. This shortfall represents a 21% reduction from 2024 levels yet still accounts for over 11% of total annual demand.

Supply-demand imbalances continue to underpin price stability despite recent volatility. Global silver supply grows at a modest 2% pace, reaching approximately 1,030.6 million ounces this year.

Mining operations contribute 835 million ounces to this total, showing similar 2% growth. Recycling volumes have plateaued at 193.2 million ounces, stabilizing after 6% growth in 2024.

Demand patterns show subtle shifts across various sectors. Total consumption will likely decline by 1% to 1,148.3 million ounces in 2025. Industrial applications remain the dominant consumption category with electronics and electrical uses projected at 465.6 million ounces.

The automotive sector demonstrates particular strength, consuming 62 million ounces annually. This represents a 15% increase since 2021, driven primarily by vehicle electrification trends.

Solar panel manufacturing marks a rare decline of approximately 1% to 195.7 million ounces, its first contraction in a decade. Investment interest shows signs of renewal.

Physical bar and coin demand rises by 7% to 204 million ounces, signaling increased confidence in silver’s dual monetary and industrial roles.

Technical indicators support this renewed interest, with the current RSI reading of 68 suggesting building momentum without reaching overbought territory.

The gold-to-silver ratio stands at approximately 100:1, significantly higher than its historical 60-70:1 average. This divergence points to potential undervaluation of silver relative to gold, creating what some traders describe as an “asymmetric opportunity.”

Market forecasts remain cautiously optimistic. Professional analysts project prices could approach $40 per ounce by summer if current trends continue. Technical patterns show a symmetrical triangle breakout above the critical $28 level, establishing a measured move target around $42.

Silver’s structural deficit persists despite supply improvements and modest demand contraction. Philip Newman of Metals Focus emphasizes that “the market is nowhere near close to rebalancing itself,” suggesting continued price support through 2025.

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