Silver Stands at a Crossroads as Geopolitics Clash with Shifting Industrial Demand

The price of silver has been hovering near $61.50 an ounce, and traders are watching closely as it teeters at this level. Despite a modest bounce on Wednesday that pushed COMEX futures to $61.47, the market remains dominated by geopolitical tensions.

Hopes for a diplomatic resolution to the Strait of Hormuz crisis have emerged, with US Treasury Secretary Bessent suggesting a deal to reopen the waterway could come within days. However, the situation on the ground remains precarious, and only nine vessels transited the strait on Monday against a weekly average of 16.

Looking beyond the headlines, a quieter but potentially more consequential transformation is underway in the photovoltaic industry. Solar manufacturers are pivoting to nickel-copper plating technology, which allows them to slash their silver usage dramatically. Industry analyses project that solar-related silver demand will fall by roughly 19 percent in 2026.

The broader supply picture remains strained, with a deficit of 46.3 million ounces forecast for this year, up from 40.3 million last year. Global demand is expected to be 1,112.6 million ounces, while supply is projected at 1,066.4 million, both down roughly two percent year over year.