After surging 20% in 2024, silver prices have climbed another 13% so far in 2025 (until March 6), marking a total gain of 35% over nearly 14 months. Market watchers believe that factors such as falling US interest rates and uncertainties surrounding the policies of US President Donald Trump have been supportive of precious metals.
Emkay Wealth Management, the wealth management arm of Emkay Global Financial Services said, “Going ahead silver price is expected to be well supported and the medium-term as well as long-term factors indicate a positive outlook for silver.”
Emkay Wealth Management in a note said that the US interest rates are expected to follow a downward trajectory for 2025, albeit at a gradual pace. Over the near to medium-term interest rates are a critical determinant of demand for precious metals. “The geopolitical situation is expected to remain fluid over the near term and the trade policies of Trump administration are expected to encourage safe-haven demand,” Emkay said.
It further added that the long-term outlook of a commodity is determined by the demand-supply scenario. The supply of silver has been in deficit over the last four years. The supply for CY24 is estimated at 1,004 million ounces whereas demand is estimated at 1,219 million ounces. The majority of this demand (60%) comes from industrial uses.
“Silver finds extensive applications in electronic devices, circuit boards, solar panels and electric vehicle batteries. As the adoption of EVs and green energy technologies continues to gain traction, the industrial demand for silver is expected to remain robust,” it said.
The wealth management firm also said that the white metal is showing signs of relatively higher momentum with the price trying to breach the crucial $33 level. With a variety of industrial uses silver is expected to have a better run, moving higher from the current level, to $36.60, $38.70, and $39.30.
“Investing in silver funds with a 12 to 18 months’ time horizon is likely to be a worthy proposition,” Emkay Wealth Management said adding the second technical factor of import is the gold-silver ratio. At current prices, the gold-silver ratio is hovering around the 90 mark, indicating a relative cheapness in silver prices. If the ratio is to go back to its long-term range of 50 to 70, it translates into strengthening silver prices over the medium term.