Silver Price Forecast: XAG Eyes $35 on Solar Demand, Jobs Data in Focus
Silver is no longer just a hedge against inflation or a favorite of jewelry buyers. It’s becoming the industrial backbone of the global...
Quick overview
- Silver is increasingly vital to the renewable energy sector, with solar demand projected to reach 261 million ounces by 2025.
- This demand surpasses jewelry consumption and is approaching investment demand levels, indicating a supply deficit for silver in the near future.
- Manufacturers are struggling to reduce silver usage in solar panels due to its critical role in efficiency, with only minor reductions expected.
- The growth of solar energy is primarily limited by grid infrastructure, but global adoption continues to rise despite connection delays.
Silver is no longer just a hedge against inflation or a favorite of jewelry buyers. It’s becoming the industrial backbone of the global renewable energy movement. According to BMO Capital Markets, demand for silver in the solar sector is expected to hit 261 million ounces by 2025, up 5.5% from 2024. To put this in perspective, only 54 million ounces were used in solar panels a decade ago.
This is huge and puts solar ahead of jewelry demand (203 million ounces) and even close to investment demand (234 million ounces) this year. The analysts believe this industrial demand will keep silver in a supply deficit for the foreseeable future.
2025 Solar Silver Demand: 261M oz (+5.5% YoY)
Jewelry Demand: 203M oz
Investment Demand: 234M oz
Thrifting Can’t Slow the Trend
Manufacturers have tried to reduce the amount of silver per solar panel—a practice known as “thrifting”—but we’re near the limit. In the next decade, panels may use just 8 milligrams of silver, down from 12.5 mg today. But this decline is slowing sharply and further reductions will impair conductivity.
Silver’s critical role in photovoltaic efficiency means it’s still essential, especially for newer high-output cells. According to BMO, silver paste is “process-critical”—meaning any further cutbacks are counterproductive.
Current Silver Use/Panel: 12.5 mg
2035 Silver Use/Panel: 8 mg
Thrifting 2009-2016: -13%
Thrifting 2024-2035: -4.1%
Infrastructure is the Only Brake
The only real cap on solar growth? Grid infrastructure. In the US alone, the total solar and battery project pipeline is twice the country’s existing capacity, according to Berkeley Lab. But even with connection delays, global adoption is surging. China is the cost-cutter, but even in protectionist regions like the US, policymakers won’t resist cheaper, scalable solar for long.
This demand tailwind has helped silver break out of the descending channel and test resistance at $32.77. If confirmed, the next upside targets are $33.17 and $33.53.
Technical Trade Setup:
Buy Entry: Above $32.68
Targets: $32.77, $33.17
Stop Loss: $32.46
As fundamentals move into structural scarcity and industrial strength, silver may not just be short-term bouncing—it could be setting up for a long-term move to $35 and beyond.
Bonus: U.S. Jobs Data Today
Don’t miss the 12:30pm ET macro trio: Non-Farm Payrolls (138K), Unemployment (4.2%), Hourly Earnings (0.3%). Any downside surprise will help silver.
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