Silver Unleashed: Structural Deficit and Increased Investment Demand
Silver is running wild. The silver ounce strongly breaks the historical maximum and the demand for silver far exceeds the available supply. Some reasons that could explain the movement:
A structural fall in inventories due to demand far exceeding supply. According to the latest World Silver Survey of 2025, silver could chain 5 consecutive years of deficit which, in aggregate, could approach 800 M ounces, which is approximately the total production of one year.
An alternative to gold. The vertical and constant rise of gold has led to the search for other options. The demand for silver as an investment asset (bullion and coins) is soaring and being implemented through physically backed ETFs, a product accessible to retail investors.
Fund Managers Begin to Limit New Subscriptions to Physically Backed ETFs
The scarcity of silver is leading Indian fund managers (such as Kotak Mutual Fund, UTI Mutual Fund and SBI Mutual Fund) to temporarily suspend new subscriptions to their physically backed funds.
The accumulation of investment and jewelry demand means that ETFs are paying an exaggerated premium for "touching". India has an important tradition of physical jewelry purchases that is accentuated at this time of year due to the accumulation of religious festivities.
