The silver market is forecast to record a fifth consecutive market deficit in 2025, with demand once again outstripping supply and most above-ground silver stocks unavailable to meet demand, at any price.
According to the Silver Institute's analysis, the movement of the silver price does not correlate with changes in above-ground stocks.
“Silver, which in the past was only a store of wealth, for example in bullion, silverware, jewelry, and coins—items that for the most part remain as they were produced and are largely unavailable on the market—has become an industrial metal that is generally consumed or removed from circulation, except for recycling, the effect of which can vary.”
This is bad news given the growing demand for silver, especially for industrial use.
Movements in bullion stocks have an impact on the price of silver and vice versa, but according to the Silver Institute, the vast majority of above-ground silver stocks are “immobile.” There are only small net additions or subtractions to these stocks annually.
Some other notes from the Silver Institute report:
· Increases in bullion stocks are often positively correlated with price, as investment demand grows when silver prices rise, further stimulating higher prices.
· In bear markets for silver, declines in bullion stock prices have occurred over several years and have exacerbated these declines. However, these declines have set the stage for silver to experience more substantial gains as investors have rebuilt their bullion holdings.
· Surface stocks of manufactured products are less price sensitive than bullion stocks. Only specific subsets of demand for silver manufactured products show price sensitivity, such as jewelry and silverware.