Silver Eyes $40 as Growing EV, Solar Demand Builds Case for Long-Term Upside

• Supply struggles to keep pace as industrial demand and solar energy drive silver consumption higher.
• Global X Silver Miners ETF nears resistance at $54, but longer-term target of $75 remains.
• Pan American Silver (TSX:PAAS) posts steady profit growth, signaling potential for a breakout to 2021 highs.
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Silver prices are approaching the $40 per ounce mark, a key psychological level that supply pressures have managed to hold for now. But with demand growing faster than supply and the US dollar weakening due to disappointing jobs data, further price pushes are likely.

The Silver Institute expects another supply shortfall in 2025, which may worsen in the coming years. This is mostly due to rising demand from the energy and electric vehicle industries. Around half of all silver produced goes to industrial use, with solar energy alone using about 17%. At the same time, silver supply has been falling for nearly a decade.

Most silver is extracted as a byproduct of mining other metals, and only a quarter comes from direct silver mining. This makes it hard to quickly adjust supply to meet rising demand.

Global X Silver Miners ETF in a Strong Upward Trend

For those exploring investment opportunities in the silver market, the Global X Silver Miners ETF (NYSE:SIL) is worth watching. Its value has been steadily rising. Right now, it is nearing a key level of long-term resistance around the $54 price range, where demand may face a challenge.

If buyers manage to push past the $54 resistance level, a move toward the next major peak around $75 becomes more likely. However, this climb will probably take time.

Looking at the ETF’s structure, key holdings include companies directly involved in silver mining, such as Wheaton Precious Metals (NYSE:WPM) and Pan American Silver (NYSE:PAAS).

Between the two, Wheaton Precious Metals holds the largest weight in the ETF. However, from a fundamentals perspective, Pan American Silver appears stronger based on key indicators tracked by InvestingPro.

Over the last three quarters, Pan American Silver has consistently grown its net profit. If this trend continues, the stock could climb to new highs, potentially reaching levels last seen in mid-2021.

The key factor influencing both the individual companies and the entire fund remains the price of silver, which still shows potential for further gains.

End of Silver Price Correction?

At the end of July, silver prices were in a correction phase, briefly dipping to around $36.50 per ounce. That level held firm, and now it appears the pullback has ended, with buyers starting to take control again.

A move above $38 per ounce would be the first technical signal that the upward trend is back on track. This could open the door for another push toward the $40 per ounce level.

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