Silver Surges: Breaking the $33 Resistance Amid Global Supply Deficits

Silver is trading at $33.16 per ounce as of this morning, showing a slight increase of 0.05% or $0.015 from yesterday’s close. The precious metal has maintained its position above the $33 mark, continuing the upward momentum seen in recent sessions.

Yesterday, May 20, silver experienced mixed performance across global markets. The metal traded at $32.237 per ounce during the morning session.

This reflected a slight decline of 0.04% from the previous close. However, as the day progressed, buying interest emerged, particularly in Asian markets, pushing prices higher.

In the futures market, silver for July delivery on the Multi Commodity Exchange (MCX) increased by ₹662 to trade at ₹95,980 per kg yesterday, indicating positive sentiment among traders despite some spot price volatility.

The overnight session saw silver testing the resistance area near $32.85, which analysts have identified as a crucial level for determining the next directional move. By early morning today, the metal had broken through this resistance, settling at $33.16.

Global Market Performance

Asian Markets

Asian trading saw positive momentum for silver, with prices rising across major markets. In Vietnam, silver prices showed a reversal with slight increases across trading locations. At Phu Quy Jewelry Group, silver was listed at 1,244,000 VND/tael (buy) and 1,282,000 VND/tael (sell), representing a small increase of 3,000 VND/tael in both directions compared to the previous day.

Indian Markets

The Indian silver market has shown significant strength today. Silver prices in Mumbai have shot up by ₹3,000 to trade at ₹1,00,000 per kg, reclaiming the psychological six-figure mark.

This represents a substantial 2.31% increase from yesterday’s price of ₹98,396 per kg in the Bid region of Maharashtra.

City-specific silver rates as of this morning:

• Mumbai: ₹97,660 per kg
• Delhi: ₹97,490 per kg
• Kolkata: ₹97,550 per kg
• Chennai: ₹97,960 per kg

Western Markets

In Western markets, silver futures have shown resilience. The continuous contract is trading at $33.235, up 0.18% or $0.061. Silver May 2025 futures were last reported at $33.065, with a daily range of $32.070 to $33.065.

Fundamental Drivers

Several fundamental factors are supporting silver’s positive performance:

Supply-Demand Dynamics

The silver market is experiencing its fifth consecutive year of deficit in 2025, with demand consistently outpacing supply.

The Silver Institute forecasts that despite a 3% increase in global silver supply to 1.05 billion ounces (an 11-year high), the market will remain in a sizeable deficit of approximately 149 million ounces this year.

Silver mine production is expected to reach a seven-year high in 2025, rising by 2% to 844 million ounces. Increased output is anticipated from both existing and new operations in several markets, including China, Canada, Chile, and Morocco.

The ramp-up of operations like Hecla’s Keno Hill and Gold Fields’ Salares Norte will contribute to rising output.

Industrial Demand

Industrial fabrication is forecast to grow by 3% this year, with volumes on track to surpass 700 million ounces for the first time. This growth is primarily driven by:

• Photovoltaic (solar panel) installations achieving another all-time high in 2025
• Increased automotive industry demand despite slower growth in battery electric vehicle production
• Consumer electronics market expansion, particularly due to artificial intelligence systems development
• Growth in the ethylene oxide sector and modest gains in brazing alloys

Investment Demand

Physical investment in silver is forecast to rise by 3% in 2025, thanks to improving demand in Europe and North America. As Western investors adjust to new price levels, fresh investment is expected to improve, and profit-taking will ease.

Technical Analysis

From a technical perspective, silver has shown positive momentum:

• The metal has broken through the resistance area between signal lines upwards, indicating buying pressure
• Current resistance is identified near the $33.50 level, which stopped the previous minor impulse wave
• Support is seen at the $31.70 level, which was tested and held at the end of April
• The daily Bollinger Bands and the 38.2% Fibonacci correction of the upward impulse from April have strengthened this support level

According to wave analysis from May 20, silver is expected to rise to the next resistance level of $33.50, which previously stopped a minor impulse wave. The metal recently reversed from the pivotal support level of $31.70, strengthened by the lower daily Bollinger Band.

Market Sentiment

Market sentiment toward silver has improved during early 2025, despite headwinds from a firmer dollar and Treasury yields. This largely reflects several macroeconomic and geopolitical risks, which have continued to underpin inflows into safe-haven assets.

The recovery has been assisted by short covering by tactical investors in the futures market amid fears about President Trump’s tariff plans.

Uncertainty over US trade and foreign policy, record-high US equities, and worries about US public debt levels have all reinforced interest in portfolio diversification, benefiting silver investment.

However, potential tariff hikes under Trump’s administration and their impact on global economic growth, particularly in China, remain concerns that could restrain investor enthusiasm across the broader industrial metals complex.

Outlook

Trading Economics forecasts silver to trade at $33.10 per ounce by the end of this quarter and projects a price of $35.71 in 12 months’ time, suggesting an optimistic medium to long-term outlook despite current volatility.

With silver having increased 4.25 USD/t. oz or 14.72% since the beginning of 2025, the metal continues to demonstrate its unique position as both a precious metal with monetary value and an industrial metal with expanding applications.

The persistent structural deficits, combined with growing industrial demand and investment interest, provide a solid foundation for continued price support throughout 2025.

As the trading day progresses, market participants will be closely monitoring US macroeconomic data releases, which could provide further direction for silver prices in the coming sessions.

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