Silver Price Forecast: Top Trends That Will Affect Silver in 2025

How will Trump’s presidency impact silver?

As Trump’s inauguration approaches, speculation is rife about how he could affect the resource industry.

The president-elect ran on a policy of “drill, baby, drill,’ and while his focus was largely on oil and gas companies, mining sector participants have taken it as a positive sign for exploration and development.

Trump’s promise to reduce permitting timelines for anyone making an investment of US$1 billion or more in the US has excited sector members, and could end up being a boon to silver companies in the country.

However, part of the help Trump has promised to mining companies comes from reneging on environmental commitments, including the Paris Agreement. This could end up weighing on silver.

Current President Joe Biden’s Inflation Reduction Act includes tax credits and deductions for solar projects, and some experts are concerned that the incoming administration and the new Elon Musk-led Department of Government Efficiency (DOGE) could impose reversals or have the entire act gutted.

“Tesla bought SolarCity, which became Tesla Energy. They are an important provider of solar panels. Again, Musk’s new role heading DOGE and obvious close connection to Trump just might help mitigate risks to Tesla and its solar panel/power storage business. If that happens, and whatever form it may take, it could shelter solar panel production and sales in the US to a considerable degree,” Krauth explained via email.

He also noted that Trump’s presidency isn’t without risks and that much uncertainty still remains.

Mind Money CEO Julia Khandoshko also isn’t worried about solar demand in the US.

Silver deficit expected to continue

Industrial segments have been critical for silver demand in recent years.

As of November, the Silver Institute was forecasting total industrial demand of 702 million ounces of silver for 2024, an increase of 7 percent over the 655 million ounces recorded in 2023.

The institute attributes much of this increase to energy transition sectors, highlighting photovoltaics in particular.

However, these gains are coming alongside flat mine production, which is expected to grow only 1 percent to 837 million ounces during 2024. Once factored in, secondary supply from recycling pushes the total supply of silver to 1.03 billion ounces, a considerable gap from the 1.21 billion ounces of total demand.

Both Krauth and Khandoshko think the gap between silver supply and demand will continue.

Khandoshko expressed a similar sentiment, saying demand is likely to keep outpacing supply.

However, she also sees geopolitics and a global macroeconomic situation that could constrain both demand and supply growth in 2025. For example economic difficulties in Europe and China could slow energy transition demand.

“The problem is that silver production is mainly concentrated in geopolitically challenging areas, such as Russia and Kazakhstan, where securing funding for supply expansion is quite difficult,’ she explained.

‘These factors limit silver’s growth potential compared to gold, which in turn benefits from its role as a safe-haven asset during times of economic uncertainty.’

Silver M&A set to heat up in 2025

As silver supply becomes increasingly stressed, experts are eyeing projects that are ramping up.

Krauth highlighted Aya Gold and Silver’s (TSX:AYA:OTCQX:AYASF) Zgounder mine expansion. Its first pour was at the end of November, and it is expected to ramp up to full annual output of 8 million ounces in 2025.

Endeavour Silver’s (TSX:EDR,NYSE:EXK) Terronera mine is also nearing completion. Once complete, the mine is expected to produce 15.5 million silver equivalent ounces per year.

For its part, Skeena Resources (TSX:SKE,NYSE:SKE) is working to develop its Eskay Creek project. It is set to come online in 2027, and is expected to bring 9.5 million ounces of silver per year to market in its first five years.

Krauth said a rising silver price is likely good news for mergers and acquisitions in 2025.

“Higher prices, since they translate into higher share prices, meaning acquirers can use their more valuable shares as a currency to acquire others … I think 2024 will bring deals between mid-tiers and between juniors,’ he said.

Krauth added, ‘The truth is that many mid-tier producers have not been spending on exploration. Something has to give, so I think we’ll see this space heat up.’