This study investigates the determinant factors of supply and demand of silver. The study covers the time period 1973 to 2011, the factors that is being investigated is US industrial production index, US dollar index, US adjusted monetary base, US real interest rate, oil price, silver price, base metal prices and a time trend variable representing technological change. In order to examine how these variables affects supply and demand of silver, two models, one for supply and one for demand are developed and regressed by two-stage least squares regression techniques. The result of the demand regression shows that price of silver, US industrial production index, US adjusted monetary base and US dollar index and technology where statistically significant, where US industrial production had the largest impact on demand. The result of the supply regression shows that price of oil, US real interest rate and technology where statistically significant, with price of oil as the most important determinant factor for supply.