Silver “won’t lose its luster over the long term” despite economic headwinds, according to Bank of America via Investing.com

Investing.com – Prices could see near-term headwinds from broader economic uncertainty, although the metal has received support from global consumption outstripping supply, according to analysts at Bank of America.

A rising US dollar and weak industrial activity have weighed on silver recently, while President-elect Donald Trump’s plans to impose tough tariffs on imports from Canada and Mexico – major suppliers of the metal to the US – threatened to disrupt silver markets. The analysts said in a note to clients.

However, the price of silver has hovered around $30 per ounce over the past nine months. By 04:02 EST (09:02 GMT) on Thursday, silver was trading 0.5% higher at $30.81.

Bank of America analysts led by Michael Widmer said that, in their view, this resilience is linked to “persistent silver market deficits,” with “limited growth in mine production (…) a major source of price support” in particular.

Research by Bank of America found that global silver consumption exceeded production of the metal in both 2022 and 2023, and is expected to do so again in 2024.

They estimated that 37,083 tons of silver would be consumed this year, a 0.4% decrease from the amount expected in 2024, while production is expected to rise by 3.5% to 33,021 tons. Despite the change, the silver market will remain in deficit – a trend that Bank of America analysts expect will continue into 2026.

“The silver market has been in deficit for some time and now that shortage is finally being accounted for,” the analysts wrote. This support has been reversed in some regions, with silver “trading at a premium” in India and consumers in China having to “pay up to source an ounce,” they noted.

As a result, analysts said silver has “strong fundamentals,” adding that it is “more constructive” for the metal.

“Silver will not lose its luster in the long run,” they said.