Silver Sets New Records as the World Scrambles for Supply
Silver has surged to record highs in 2025, up an incredible 79% year to date, as of December 4. While certainly impressive, many industry experts believe the sharp rise is far from over.
Though the market has been closely watching the incredible surge in gold’s price over the last year, now silver is drawing attention. Driven by a mix of constrained supply, heavy physical demand, and rising industrial use, the price of silver has almost doubled this year, marking its most robust performance in decades.
“Some people were having to transport silver by plane rather than on cargo ships to meet delivery demand,” said Paul Syms of Invesco. “While we’ve seen the spike up, we’ve seen the price come down a little bit. Longer term, there’s a different dynamic this time that could keep silver at reasonably high prices and maybe continuing to go up for some time to come.”
October marked only the third time in the past 50 years that silver prices have peaked. Previous highs came in January 1980, when the Hunt brothers tried to corner the market, amassing amassed a third of the world’s supply, and in 2011, after the U.S. debt-ceiling crisis pushed investors into safe-haven assets.
This time, the rally has been different.
“Silver is only about a tenth the size of the gold market, and that short squeeze obviously sort of caught a few investors by surprise,” Syms said.
The structure of today’s market also helped accelerate prices. After “Liberation Day,” gold spiked while silver briefly fell, sending the gold-silver ratio above 100. In April, the ratio reached a historic high. A high ratio suggests silver is undervalued relative to gold, which encouraged investors to pile in.
At the same time, physical supply was tightening.
“The risk managers in financial and industrial entities did not want to let any metal go out of the states for fear that it might come back in at 35% higher for example,” said Rhona O’Connell, head of market analysis EMEA and Asia at StoneX.
India became a major driver of demand in the autumn as monsoon and harvest seasons ended.
“Farmers don’t really like the banks very much, so gold and latterly, silver, tend to be the first port of call when they’ve got the harvest in,” O’Connell said.
India consumes about 4,000 metric tons of silver each year, largely for jewelry, utensils, and ornaments. Yet 80% of India’s silver is imported, with the U.K., the UAE and China serving as key suppliers.
London’s vaults have been steadily draining. The London Bullion Market Association held 31,023 metric tons of silver in June 2022. By March 2025, inventories had dropped to 22,126 metric tons.
“There was basically no available metal left in London,” O’Connell said. Borrowing costs reflected the stress.“At one stage, to borrow overnight was costing 200% on an annualized basis,” she noted.
Longer term, industrial demand remains the wildcard. The Silver Institute reports that mine output has declined over the past decade, particularly in Central and South America, while demand has surged from nearly 31,000 metric tons in 2016 to over 36,000 metric tons in 2024.
“Over the course of the past 12 months or so, the underlying surplus has started to turn into a deficit for three reasons: the impact of electrification of the vehicle fleet, artificial intelligence, and photovoltaics,” O’Connell said.
Syms added, “At the moment, a standard electric vehicle has about 25 grams of silver. Larger EVs have 50 grams. If we move into solid-state silver batteries, each electric vehicle might require a kilo or more.”
Silver straddles two worlds, precious and industrial.
“Silver crosses over that bridge between precious and industrial metals, and as technology advances with batteries and solar panels, it has great use cases in a more electrified world,” Syms said.
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