India's Duty Cut Could Spark Massive Silver Demand Wave
The silver price has been hovering near a crucial level that could determine whether its recovery will continue. However, the chart is not the only factor influencing the current situation.
India's decision to consider reducing import duties on gold and silver from 15% to 6% could lead to a significant increase in demand for precious metals in the country. This move comes as the global silver market faces tight physical conditions, with Fthegurus predicting that these conditions could push the price of silver towards $200 by 2030.
The Silver Institute expects a global silver market deficit of 67 million ounces this year, which would be the sixth consecutive year of deficits. This persistent shortage has reduced available inventories and makes it difficult for supply to keep up with demand. Much of the world's silver is produced as a byproduct of mining other metals, and higher prices do not necessarily lead to increased production.
The industrial market for silver is also driving demand, with solar panels, electric vehicles, power grids, and AI-related infrastructure requiring significant amounts of the metal. However, some substitution has occurred in the solar industry, which could reduce demand slightly. Recycling provides another source of supply, but it too has its limits.