The nearest support is a low at $28.75. If it holds, prices could rebound into the pivot at $30.44. Overcoming this level will shift momentum to the upside, setting up the possibility of a near-term surge into a resistance cluster formed by another pivot at $32.26 and the minor top at $32.33.
Taking out $28.75 with conviction opens the door to a possible steep break with initial targets at $26.47 to $26.02.
Supply Deficits and Industrial Demand Support Long-Term Outlook
Silver’s supply-demand imbalance remains a supportive factor for the long term. In 2024, production rose by just 2% to 1.03 billion ounces, while demand surged 7% to 1.21 billion ounces, leaving the market with a 182-million-ounce deficit. This marks the fourth consecutive year of undersupply, largely driven by industrial applications tied to green technologies. Demand from solar panel manufacturing and electric vehicle production continues to outpace supply, reinforcing the long-term bullish case for silver.
China’s $411 billion infrastructure stimulus for 2025 is expected to further boost silver consumption, aligning with the country’s renewable energy initiatives. Industrial demand linked to these projects could significantly tighten silver’s supply-demand dynamics moving forward.
Fed Policy and Treasury Yields Weigh on Near-Term Performance
The Federal Reserve’s measured approach to rate cuts remains a major obstacle for silver. After three cuts in late 2024, the Fed signaled plans for only 50 basis points of easing in 2025. This cautious stance supports the U.S. dollar and keeps Treasury yields elevated, reducing the appeal of non-yielding assets like silver. The 10-year Treasury yield currently sits at 4.631%, adding to silver’s opportunity cost.
Geopolitical Uncertainty Provides Modest Safe-Haven Support
Geopolitical risks continue to offer limited support for silver. While gold remains the primary safe-haven asset during times of uncertainty, silver benefits indirectly. Ongoing conflicts in Ukraine and the Middle East, alongside central bank gold purchases, have helped stabilize precious metals markets, preventing deeper pullbacks in silver.
