Silver's Structural Deficit: A Primer
Four consecutive years of physical deficit, driven by solar and electrification, meet an inelastic by-product supply base.
The silver market has now recorded four consecutive years of physical deficit — a duration and magnitude that has forced above-ground inventories into visible drawdown. This primer explains why the deficit is structural, not cyclical.
The demand engine
Industrial demand — led by photovoltaics, EV electronics, and grid electrification — has grown faster than any analyst forecast from 2020. Solar alone now consumes more silver annually than the entire jewellery sector.
Why supply cannot respond
Roughly 70% of mined silver is a by-product of lead, zinc, and copper operations. Silver-primary mines represent a minority of production. That means silver supply is essentially insensitive to the silver price on any horizon shorter than several years.
Implication for the ratio
The gold-silver ratio remains historically elevated. A sustained industrial pull plus any monetary bid from gold is the classic setup for silver to close the gap — usually violently.
Precious metals correspondent covering gold, silver, and platinum group markets.
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