Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Silver Supply Deficit Frames A Bullish Outlook

By Stefan GleasonMarket OverviewApr 25, 2022 03:05PM ET
Silver Supply Deficit Frames A Bullish Outlook
By Stefan Gleason   |  Apr 25, 2022 03:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Silver prices have retreated since hitting a multi-year high in early March. While disappointing to bulls, they should find some encouragement in the white metal’s technical and fundamental drivers.

To begin with, gold and silver are still up for the year overall. By contrast, stock and bond markets are sticking investors with significant losses.

Investors are finding out the hard way that in an environment of high inflation and rising interest rates, there are no safe havens in paper assets.

Precious metals aren’t immune from market volatility, but they exhibit more technical strength in this environment than conventional financial assets.

Technically, the 200-day moving average acted as resistance multiple times until the price broke it decisively in March. It may now serve as support in the $24 range.

Of course, bulls would like to see long-term moving averages turn up. For now, they are reflecting choppy price action – something that will eventually give way to a directional trend.

The fundamentals for silver generally support the case for higher prices. Last year was a stellar one for silver demand, as confirmed by the Silver Institute’s recently released World Silver Survey 2022.

The Silver Institute reports,

“The global silver market realized growth in every demand category in 2021, marking the first time all key sectors rose in tandem since 1997. Surpassing pre-pandemic volumes, total global silver demand achieved its highest level since 2015, surging 19 percent to 1.05 billion ounces."

Bullion demand came in especially strong.

“Physical silver investment (sales of silver coins and bars) leaped by 36 percent to 278.7 Moz, its highest level since 2015, as retail investors in North America and Europe, motivated by safe-haven and inflationary concerns, took advantage of periodically lower silver prices to purchase coins and bars.”

Supply, meanwhile, failed to keep up with demand. The silver market experienced a deficit of 51.8 million ounces, according to the World Silver Survey, the biggest since 2010.

This year, industrial demand for silver is expected to rise to a new record, driven mainly by growth in solar and other electrical applications.

Investment demand is more of a wild card but is likely to remain strong given the threats of war and inflation, along with possible further underperformance of financial markets.

Trading out of assets that are being produced in surplus for those facing supply shortfalls is an obvious value play.

Inflation reflects the fact that too many currency units are being created. Despite the Federal Reserve’s vow to tame inflation by hiking rates, the total currency supply remains on an upward path.

Owning an asset that is becoming increasingly scarce, like silver, offers tremendous upside potential while providing long-term protection against currency depreciation.

Silver Supply Deficit Frames A Bullish Outlook

Related Articles

Silver Supply Deficit Frames A Bullish Outlook

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email