Silver Supply Struggles to Keep Up as Demand Skyrockets

"Buyers are overwhelming the sellers - it's not even speculators. With tariffs, global disruptions, and nations moving assets into safer jurisdictions, silver is starting to get disrupted. The market is primed for a massive move," Phair said.

Throughout 2025, silver has drawn increasing attention from institutional and retail investors alike. While gold has long been the centerpiece for wealth preservation, silver - historically seen as a "smaller" and more industrially oriented metal - is now attracting attention as a valuable hedge and investment.

Phair explained that supply pressures are partly logistical. "The U.S. has plenty of silver for industrial use, but London inventories are thin. Many countries and companies are relocating their assets, which creates bottlenecks and higher lease rates," he said. These factors, coupled with rising premiums and soaring transport costs, are forcing a physical squeeze on the metal.

The surge in demand isn't limited to bullion investors. Industrial users of silver, including semiconductor and medical device manufacturers, are increasingly competing for limited supply. Simultaneously, new investors - drawn by silver's relative affordability compared to gold - are entering the market, adding to the strain.

Phair also noted the changing global perception of silver: "Some regions historically treated silver like copper, but as prices rise, it's increasingly being seen as a precious metal. That attracts new population centers of investors who didn't participate last decade."

While the situation is complex, Phair suggests a potential resolution could emerge in the coming weeks if additional metal is released into the market. "There's a chance this gets rectified in another week or two. But demand keeps picking up, and silver may continue higher, with extreme volatility along the way," he said.

For investors and collectors, the message is clear: silver's market is tightening, and the next few months could see dramatic price moves as the global supply-demand imbalance unfolds.